FCA Confirms Price Cap Rules For Payday Lenders New Rules Will Limit Total Repayments To Twice Amount Borrowed 13.11.2014 The Financial Conduct Authority (FCA) has confirmed its price cap rules for payday lenders, which will take effect at the beginning of next year. From January 2nd 2015, interest and fees on high-cost, short-term credit loans must not exceed 0.8 per cent per day of the amount borrowed. Fixed default fees have been capped at £15, while the total cost of a loan - including fees and interest - has been capped at 100 per cent. This means that borrowers will never have to pay back more than twice the amount they borrowed, and sets the fee cap for a 30-day loan at £24 per £100 borrowed. The FCA says the new rules, which remain unchanged following a period of public consultation earlier this year, are intended to strike a balance between the need for a viable high-cost credit market and the need to protect borrowers. "For people who struggle to repay, we believe the new rules will put an end to spiralling payday debts," said FCA chief executive Martin Wheatley. "For most of the borrowers who do pay back their loans on time, the cap on fees and charges represents substantial protections." Expert Opinion It is welcome to see the FCA issuing this guidance which will not only provide some protection to consumers, but also ensure that responsible activity in this market is encouraged and promoted. "Lenders have a duty to meet their compliance in this area we would urge any organisations with concerns regarding the changes to seek legal or compliance advice to ensure they meet all of their responsibilities." Sarah Wallace, Partner Key contact Sarah Wallace Partner +44 (0)780 889 9657 Email Sarah Tags Business Investigations And Prosecutions Sarah Wallace London Related articles 15.02.2017Cocoon Aims To Secure £2.5m For Latest Expansion Drive 14.02.2017Serious Fraud Office - The Big Funding Debate 14.02.2017Inflation Rises As UK Feels Effect Of Weak Pound Post-Brexit Vote 10.02.2017Today's Court Of Appeal Ruling To Have Impact on Uber And Other Firms In 'The Gig Economy' 09.02.2017Court Of Appeal Employment Ruling To Have Impact on 'Gig Economy'