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

Mar 07, 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: Why companies don't learn from their mistakes

add to favorites email to friend print save as pdf

Related Stories

People more likely to overestimate their credit quality

Jun 02, 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 ...

College students and credit card debt—parents at fault?

Oct 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 ...

Chinese credit card usage growing quickly, study finds

Aug 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 ...

Recommended for you

Predicting human crowds with statistical physics

Feb 27, 2015

For the first time researchers have directly measured a general law of how pedestrians interact in a crowd. This law can be used to create realistic crowds in virtual reality games and to make public spaces safer.

Bribery 'hits 1.6 billion people a year'

Feb 27, 2015

A total of 1.6 billion people worldwide – nearly a quarter of the global population – are forced to pay bribes to gain access to everyday public services, according to a new book by academics at the Universities of Birmingham ...

Broken windows thesis springs a leak

Feb 27, 2015

The broken windows theory posits that minor misdemeanors, like littering or graffiti spraying, stimulate more serious anti-social behavior. LMU sociologists now argue that the idea is flawed and does not ...

User comments : 0

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.