Responding to the Money Advice Service’s Christmas spending survey which forecasts that 1.4m people will rely on payday loans this Christmas, Russell Hamblin-Boone, Chief Executive of the Consumer Finance Association, which represents some of the best known payday lenders:
“MAS has a track record for exaggerating its figures, so we treat them with some caution. In this case they estimate the market to be 500,000 larger than all other expert analysts* have shown it to be. It is disappointing that MAS has neglected to offer the most important advice – find out exactly how much you will need to pay back and make sure you can afford it. Anyone considering a short-term cash advance to cover Christmas spending should look at the credit options available to them and never take a short-term loan to cover long-term debt”
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Editor notes
* Market size
The Financial Conduct Authority estimates that 870,000 (93% of consumers) will be able to get a loan after the cap is introduced on 2nd January 2015. It also estimates that 70,000 of individuals won’t be able to get a loan after the cap so the FCA is therefore putting the size of the current market at 940,000.