Christian financial advisers welcome 'payday loans' review

Feb 24th, 2012

Aiden Vaughan

The Association of Christian Financial Advisers is welcoming the government's investigation into 'payday loans', and calls for legislation to cap interest rates.

ACFA applauds the decision to conduct an Office of Fair Trading review into payday loans, because of concerns that some lenders may not be able to afford the payments.

On December 23 ACFA wrote to Chancellor George Osborne expressing 'increasing dismay' over the manner in which payday loan companies are allowed to trade.

The ACFA chairman, Aidan Vaughan, wrote: "I believe that the freedom to charge interest rates that can be in excess of 3,000 per cent is simply unfair and unreasonable to the consumer. These rates of interest are not dissimilar to those of a back street loan shark, but dressed up with a fancy website and slick paced advertising.

"Many consumers are now using this easy access to credit as a form of roll-over credit, month by month, thereby racking up unaffordable debt at extortionate rates of interest."

ACFA has called on the Chancellor to introduce legislation to cap interest rates for all personal lending - from payday loans to unauthorised bank overdrafts. ACFA believes interest should limited to a rate similar to that imposed on Credit Unions - currently 12 per cent. ACFA is also calling on the government to cap APR at a maximum percentage above base rate.

ACFA has asked the government to urgently introduce a measure to limit interest rates in the forthcoming budget.

"We're delighted the government has announced this review of so-called Payday loans,' says Aidan Vaughan. 'There should be no place for the extortion of the desperate and vulnerable."

ACFA is the UK network of Christian financial advisers and related professionals. It aims to be the voice of Christian financial advice and champions best practice in the UK. The ACFA website offers links to Christian financial advisers across the UK.

For more information see: www.christianfinancialadvisers.org.uk

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