Payday Loan Trade Associations and the Good Practice Customer Charter

Payday Loan Trade Associations and the Good Practice Customer Charter

When a payday lender has been introduced here we make a reference to a trade association membership (if this is held). Most of the established names have took on a member place and some have even joined a pair. This is a clear sign that responsible lending is important and is being played out on a daily basis. The Good Practice Customer Charter that has also been referenced was setup in late 2012. This was a proposal between a selection of the leading trade associations that included the BCCA, CCTA, CFA and the FLA. Since this Charter has been live, we have witnessed a series of set requirements.

This includes having to detail how a loan works and how much the cost would be per £100 borrowed (including any fees). This is how we calculate the costs here since you have a much greater idea of the true product value, rather than there being confusing APR figures to digest. This agreement also makes sure that interest and charges are frozen if a customer is struggling with repayments. Another example would be providing information on independent free debt resources who can assist those in need. There are various other commitments that must be followed and any lender on board should provide a full PDF explaining the Charter.

The various payday loan trade associations themselves of course already hold a range of existing codes of conduct that must be followed. Unlike holding an Interim Permission Licence, there is no requirement to take on any such membership. Each lender must in fact pay to join up that is typically took as an annual payment (usually in the thousands). Once this is paid and they can advertise the fact that they are following a strict code of conduct, this would naturally help to drive conversions based on trust. This essentially makes it clear that you are dealing with a professional lending outfit, rather than a fly-by-night firm.

In regards to payday loan trade associations, the CFA has been a notable choice with such major players as PaydayUK and QuickQuid. The BCCA is used by the likes of The Lending Stream, Uncle Buck and WageDayAdvance. The CCTA has Cash Genie, Mr Lender and Wizz Cash on board. Finally, the FLA is less well known although they have Wonga there. Some as noted carry multiple memberships. The payday loan Good Practice Customer Charter has been a positive step forward, but the government and the media have not been so welcoming. This is particularly a concern with the government who are considering following America by imposing capped interest rates.