Mon, 1 Aug 2011

Pay day lending code launch meets with condemnation

The Consumer Finance Association (CFA) launched its pay day lending code at the Houses of Parliament last month. The event was attended by Walthamstow MP Stella Creasy, who has campaigned against some of the practices undertaken by the industry. She attacked the code during the event, saying it is ‘not good enough’.

Creasy told Payroll World she was concerned that neither the Citizens Advice Bureau (CAB) nor the consumer body Consumer Focus had attended the event. ‘My concern is that we are not at a starting point without CAB.’

Creasy insisted that she wasn’t trying to put pay day lending companies out of business but said: ‘When they won’t reveal their business model it makes it harder to understand what they do – nobody will share this with me.’

CAB admitted it did not support the code. A CAB spokeswoman said: ‘We were not at the launch because we felt the code was not strong enough. It restates what is already laid out in this area by the Office of Fair Trading.’

She added: ‘It doesn’t give enough detail to be meaningful and lacks the detail of other industry codes. CFA chair John Lamidey said: ‘We are looking to expand the forum to get more people around the table.’

The code is an attempt for the industry to self-regulate, and the host of the launch, Stephen Lloyd, Liberal Democrat MP for Eastbourne, warned that ‘if it [selfregulation] doesn’t work, the government will begin to get agitated. The industry now has the opportunity to robustly self-regulate.

‘The core objective must be that the end user has a good experience,’ he added.