In a month’s time the FCA (Financial Conduct Authority) will take over the regulation of credit deals for consumers ranging from the downright dodgy payday loans and doorstep lenders to the seemingly more respectable High Street banks and mortgage lenders with their tricks to confuse customers into paying more.
FCA credit regulation
The FCA has warned them all that it is going to take a tough approach to credit regulation and will clamp down on poor practice. It’s expected to ban misleading advertisements from the payday loan companies.
But they are not the only culprits even though their interest rates are many thousands of per cent APR (Annual Percentage Rate).
We all need to watch out when personal loans and credit cards are advertised at the ‘lowest ever rates’ or similar promotional yadda, yadda . Remember, the companies only expect around 51% of applicants will qualify for the rate advertised. The half of applicants will be charged more – and it may be a lot more.
If you apply to several companies to see which will give you the best rate then you are likely to have damaged your credit record. Then there are the mortgage lenders that are currently encouraging borrowers to take out loans over 35 or 40 years and charging hefty arrangement fees for loans into the bargain, sometimes adding the fees to the mortgage so that they too are paid for over 35 or 40 years.