News & Views

In July, we reflected on new evidence looking at people’s experience of using illegal lenders. Today, we are publishing our secondary analysis of the FCA's Financial Lives Survey, 2020 highlighting how demographic factors and financial pressures combine to increase the risk of borrowing from loan sharks. We find that having borrowed from legal high-cost lenders in the past 12 months greatly increases this risk and call for direct measures to counter cost-of-living pressures as the means to counter it.

Following reports of a possible Government U-turn concerning the regulation of Buy Now Pay Later, we provide further details of the link to credit card debt and argue that should be subject to the same rules.

Reports that Government is considering a 'U-turn' with respect to the regulation of Buy Now Pay Later products indicates a willingness to sacrifice consumer protection for temporary economic growth. It would also make for a huge divergence between Britain and other jurisdictions, including the EU, who are proposing a tougher crack-down on what, essentially, is just another version of the credit card.

Estimates of illegal moneylending use vary widely, from just 200,000 to over 1 million. But whatever the true scale of the problem, the main drivers are likely to be poverty and over-indebtedness rather than a "credit vacuum". Carl Packman reflects on the latest evidence.