Payday loans ‘need regulating’

New legislation is needed to stop payday loans companies putting people in impossible debt situations, a financial charity official has said.

New legislation is needed to stop payday loans companies putting people in impossible debt situations, a financial charity official has said.

Director of the Debt Support Trust Stuart Carmicheal commented: "There needs to be some kind of legislation that's put in place that effectively says a credit agreement can be overruled by some kind of government body."

He argued this is needed to help create a situation where if a consumer is in trouble lower repayments can be made.

However, Mr Carmicheal noted, at present payday loans firms are unwilling to "play that game" and he observed that people cannot be sure how their payday loan company will act as they all have different approaches.

Debt management services themselves have been subject to new guidance issued by the Office of Fair Trading (OFT) last week regarding the standard of advice and solutions provided.

This was welcomed by chief executive of the Cleardebt David Mond, in his capacity as chairman of the Debt Resolution Forum.

He noted that the forum's own standards actually "exceed" that of the OFT.

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