For many years the type of borrowing resource offered by payday loan lenders has been cleared into question by various consumer groups and consumers directly. Many have questioned exactly how the market place as a whole is able to realistically serve the needs of consumers and therefore offer a product worth having. A harsh assessment you will likely agree but not all that surprising.

2. For many years the type of borrowing resource offered by payday
loan lenders has been cleared into question by various consumer
groups and consumers directly.

4. Many havequestionedexactly how themarket place as a whole is able to realistically servethe needs of
consumers and therefore offer a product worthhaving. A harshassessment you will likely agreebut not all
that surprising. For many years the paydayloan lenders enjoyedgreat successwhentheir product was
introduced as a means for borrowing a small sum of money online, in a timely and convenient manner.
Thesetype of loans were not ‘readily’ available fromany existing lender and as such introduced consumers
to a whole new financial market place. For many years the lenders and the consumers using the loans were
happythe product was able to do what it intended; allow a small loan to be borroweduntil the customers
next employment pay date, at whichpointthe loan was repaid and the agreement terminated.

6. In reality however andas the years passed
it became increasingly clear that the
product on offer was no longer able to
realistically serve the needs of the modern
day consumer and instead was placing
those applying andbeing grantedsuch
loans, in often increasedfinancial
difficulty. The payday loan lenders needed
to change andit was the Financial
Conduct Authority who set about showing
them how.

8. The Financial Conduct Authority stepped in as the
regulating authority responsible for the practices of
the payday loan lenders a few years ago and since
that time have been working with providers to
understand what was being done and therefore
what could be done to improve this massive
consumer market place. What the FCA found
(Financial Conduct Authority) was that often
payday loan lenders were not correctly identifying
which customers there products were not suitable
for and of those that were; the product being
offered was simply too limited. Through a whole
host of consultations, the FCA was able to truly
understand how the market operated and as such
where improvements needed to be made.

10. What was very obvious to the FCA was the fact that payday loan
lenders were continuing to offer a product which had become dated.
The way consumers managed their money had changed compared to
the early days of the market and as such the lump sum repayment
offering was, in the vast majority of cases, no longer suitable. Instead
the FCA guided payday loan lenders to be more flexible and therefore
consumer friendly in their approach by advising instalment based
repayments would be more suitable and therefore affordable. As such
nowadays payday loan lenders offer just that with support and
quidence from the FCA as to how such loans can be offered and
afforded in a manner which is fair and consumer friendly. Changing
of the product model lead to furthermore additional changes
concerning how payday loan lenders review applications and support
their customers after the point of approval.

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