New research has revealed that Brits demand FCA approval when taking out short-term loans, with a quarter saying they are more likely to borrow money if the lender is accredited.
The research, conducted by short-term loan provider Wizzcash.com, revealed 30% of women say they are more likely to take out payday loans with an accredited lender and 25% of people earning £40,000 and over are more likely to take out a payday loan with an accredited lender.
What's more, a third of the respondents surveyed say that government regulation will make the industry more trustworthy.
Short-term loan provider Wizzcash.com has recently been formally approved by the Financial Conduct Authority (FCA), and is keen to highlight what that means. FCA approval means that the lender.
In short, FCA approval means it:
- Treats its customers fairly
- Encourages responsible lending
- Only provides loans to customers that meet affordability criteria
- Demonstrates forbearance
Commenting on the result, Hilton Freund, commercial and marketing director at Wizzcash.com, said: "Securing full FCA approval is a big win for our customers.
"It also gives us the confidence to continue operating, as we have, putting customer outcomes at the forefront of what we do.
"The FCA's accreditation shows that treating our customers fairly is at the heart of what we do."
The FCA has introduced a number of requirements on payday lenders, including:
- A price cap on the maximum amount a customer should pay
- A cap on default fees
- Customer are not to be charged more than double the loan value
- Lenders to assess the creditworthiness and affordability of customers
"We've made it a core part of our business to adhere robustly to FCA guidelines," Mr Freund added. "We'll only approve a loan if we're confident an applicant can meet the repayments promptly and have passed an underwriting affordability assessment."
