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Payday loan complaints down by 45%, says Citizens Advice

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The number of complaints about payday loans has nearly halved over the last year, according to the Citizens Advice charity.

It said the drop was as a result of new rules introduced by the regulator, the Financial Conduct Authority (FCA).

The FCA tightened the regulations in April 2014, and introduced a cap on payday loan charges in January 2015.

Between January and March 2014, before the changes, Citizens Advice received 10,155 complaints about lenders.

In the same period a year later, the number fell to 5,554 - a drop of 45%.

"The drop in the number of problems reported to us about payday loans is good news for consumers," said Citizens Advice chief executive, Gillian Guy.

"It demonstrates the impact a strong stance against irresponsible lending can have on people's lives."

Wonga

When the FCA took over regulation of the payday loan market in April 2014, it introduced new rules.

These included a limit on the number of times a loan could be "rolled over", or continued from month to month; stricter lending criteria; and limits on advertising.

Since January this year there have also been caps on repayments.

No one has to pay more than 0.8% a day of the amount borrowed, and no one has to pay back any more than twice what they borrowed.

Since April 2014, the size of the payday loan market has shrunk considerably.

While there were up to 400 high-cost short-term lenders registered back then, just 247 applied to the FCA for authorisation in February.

Two months ago Wonga - the largest payday lender - reported a 36% fall in the number of loans it was making. It said the number of customers had fallen from over a million to 575,000.

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