Findings published on the impact of a cap on the total cost of credit

March 7, 2013
Findings published on the impact of a cap on the total cost of credit

The Department for Business Innovation and Skills have today published an independent research report from the University of Bristol on the impact of a cap on the total cost of credit. The publication coincides with the publication of the Office of Fair Trading's final report on payday sector compliance. Both reports clearly show there is significant evidence of consumer detriment in the high-cost credit markets.

Sharon Collard, Director of the University's Research Centre, said: "This research is the largest study to date of customers who use high-cost credit, their reasons for borrowing and some of the issues they face as a result. At a time when UK households face unprecedented there is a clear need to address the serious detriments that the research found. These include the cost of credit but also how lenders assess affordability, multiple and repeat borrowing and loan renewals."

Ministers have confirmed that they will not impose a cap on credit at this time. They consider that a cap might be appropriate at some point in future, however, which is why the Financial Conduct Authority has been provided with specific powers to cap should they deem it appropriate once they take over responsibility for consumer credit in April 2014.

Explore further: Easy come easy go: Research shows shift in attitudes towards borrowing

Related Stories

People more likely to overestimate their credit quality

June 2, 2008

A new study published in the Journal of Consumer Affairs examined consumers' self-assessments of their credit rating and found that respondents were more likely to believe they had average or above average credit and those ...

Chinese credit card usage growing quickly, study finds

August 28, 2012

(Phys.org)—In the past two decades, the Chinese economy has undergone many drastic reforms in an effort to compete more effectively on the international market. These reforms included allowing foreign banks to offer credit ...

College students and credit card debt—parents at fault?

October 18, 2012

Parents need to be good role models to help their children make sensible financial decisions, according to Adam Hancock and his team, from East Carolina University in the US. Their work highlights that parents who argue about ...

Recommended for you

French teen finds 560,000 year-old tooth (Update)

July 28, 2015

A 16-year-old French volunteer archaeologist has found an adult tooth dating back around 560,000 years in southwestern France, in what researchers hailed as a "major discovery" Tuesday.

Oldest known Koran text fragments discovered

July 23, 2015

Two pages of text written on parchment that are believed to be sections of the Koran (Chapters 18 and 20) have been discovered by a PhD student in a British university library and are believed to be the oldest ever found. ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.