On 1st May 2019 the House of Lords debated a Motion from Lord Stevenson of Balmacara, “That this House takes note of the Financial Guidance and Claims Act 2018 (Naming and Consequential Amendments) Regulations 2019 (SI 2019/383).” The Archbishop of York, Most Revd John Sentamu, spoke in the debate:
The Archbishop of York: My Lords, I want to support the main thrust of the speech from the noble Lord, Lord Stevenson, about debt. Julia Unwin, who was chief executive of the Joseph Rowntree Foundation, did a big research project on why people were going to Wonga. They went to Wonga because it asked no questions; people knew they could get their payday loan. Other lenders asked more questions and were far more intrusive and credit was not readily available. Noble Lords know that my archiepiscopal colleague, the most reverend Primate the Archbishop of Canterbury, said that he intended not only to reform Wonga but to do away with it, and we know what has happened to Wonga.
Continue reading “Archbishop of York on the need for access to low-cost credit”
On 26th November 2014, the Bishop of Birmingham, the Rt Revd David Urquhart, led the debate on two amendments to the Government’s Consumer Rights Bill, during its Report Stage. The amendments,which the bishop spoke to on behalf of the Bishop of Truro, the Rt Revd Tim Thornton, sought to improve the regulation of payday loan adverstising in two ways – first, through preventing payday lenders from targeting children with advertising on television and second, through the regulation of unsolicited telephone calls from payday lenders. Amendment 47, related to pre-watershed advertising, was pressed to a vote by members of the House of Lords. No bishop took part in the division, and the vote was not successful. The Government did, however, state that the regulator, the Broadcast Committee of Advertising Practice (BCAP) had agreed to broaden the remit of its review into the content of payday loan advertising to consider scheduling rules. Continue reading “Bishop of Birmingham leads call for improved regulation of payday loan advertising”
On 17th November 2014, Liberal Democrat Peer Lord Sharkey asked Her Majesty’s Government what steps they are taking to bring organisations which make cold calls connected with the promotion, or sale, of financial services or products under the regulation of the Financial Conduct Authority. The Bishop of St Albans, the Rt Revd Alan Smith, asked a supplementary question:
The Lord Bishop of St Albans: My Lords, I wonder if I could press the Minister again, particularly on payday loans. The recent report published by the Children’s Society, Playday not Payday, has highlighted the regulatory gap whereby payday loan companies can make unsolicited marketing calls, whereas, as we have heard, mortgage providers are not allowed to. That report showed that over 40% of people who have taken out payday loans are receiving on average more than one unsolicited phone call a day. Does the Minister not agree that the provisions that prevent the mortgage providers from making that sort of marketing approach really must now be brought in for the payday loan companies in order to protect those who are most vulnerable?
Lord Newby: The very specific arguments that apply in respect of mortgages do not apply to payday loans. The key thing about payday loans at the moment is that the payday loan companies are being regulated for the first time, which is leading to a collapse in the number of payday loan companies, so that it is expected that we may end up with as few as four payday loan companies in operation at the end of this process. However, the FCA is undertaking an in-depth thematic review of the debt management sector to assess the quality of advice and the area mentioned by the right reverend Prelate. If it finds substantial evidence of consumer detriment of the kind he suggests, it will be able to consider the scope of further regulations.
On 5th November 2014, the Bishop of Truro, the Rt Revd Tim Thornton, sponsored an amendment to the Consumer Rights Bill, during its Committee Stage. The amendment sought to place a duty on the Secretary of State for Business, Innovation and Skills to make regulations to prevent the sale of high-cost short-term credit through unsolicited marketing calls. Following assurances from the Minister, the Bishop withdrew his amendment.
The Lord Bishop of Truro: My Lords, Amendment 105C is in my name and those of the noble Lord, Lord Mitchell, and the noble Baroness, Lady Bakewell. I declare an interest: I am chair of the trustees of the Children’s Society, which has co-ordinated this amendment as part of its campaign—of which I am very proud—on the impact of debt on children and families. We produced a report entitled The Debt Trap earlier this year.
In September this year, the Children’s Society launched another report, entitled Playday not Payday, which looked at the effects of the advertising of payday loans on children, and in particular at the telemarketing of payday loans. The report identified a gap in the regulations which allows payday loan companies to use unsolicited marketing calls to offer people payday loans through phone calls and texts. For mortgage products, this type of unsolicited marketing is completely banned by the Mortgage Conduct of Business rules. The Financial Conduct Authority, which regulates payday lenders, said: Continue reading “Bishop of Truro leads call for stronger regulation on telephone sales of high-cost short-term credit”
“These loans are not being taken seriously by young people, serious though they are. We have allowed them to take over our televisions and radios, normalising them to the point where their use is seen as casual. Just this morning I was told the story of a young woman who took out a payday loan to pay for a Domino’s pizza. That could prove to be a very expensive pizza indeed.”- Bishop of Norwich, 3/11/14
On 3rd November 2014, the Bishop of Norwich, the Rt Revd Graham James, took part in the Committee Stage of the Government’s Consumer Rights Bill, speaking in favour of an amendment to regulate the advertising of payday loans to children. The Bishop highlighted the pervasiveness of pre-wateshed advertising of payday loans, and the fact that young parents were far more likely to take out a loan than older parents. He also called for greater investment in financial education.
The amendment, which was co-sponsored by the Bishop of Truro, was withdrawn at the end of the debate, with its supporters calling for the Government to take further action before the Bill returned for its Report Stage.
The Lord Bishop of Norwich: My Lords, I rise to support the noble Lord, Lord Alton, and to speak to Amendment 105B, in the name of my colleague the right reverend Prelate the Bishop of Truro, on the advertising of payday loans. He cannot be here today but has been working very closely with the Children’s Society on this issue. Amendment 105B seeks to make provisions to restrict the times at which payday loan advertisements are shown, most specifically in relation to the watershed.
It surprised me to discover that, according to Ofcom, no less than 80% of all payday loan advertisements are shown before the watershed. It is therefore no surprise—to pick up on some of the statistics that the noble Lord, Lord Alton, mentioned—that the Children’s Society found in its survey that over half of all children aged 10 to 17 reckon that they see payday loan advertisements either “often” or “all the time”. It is the sheer quantity of these advertisements that normalises payday loans for children and young people. The research shows that one-third of all teenagers think that the payday loan adverts themselves are tempting and exciting—they are very well designed. Those teenagers are much more likely than their counterparts to say that they would consider taking out a payday loan in the future. Continue reading “Bishop of Norwich supports ban on pre-watershed payday loan advertising”
On 13th May 2014, the Rt Revd Alan Smith, Bishop of St Albans, received answers to written questions on petroleum gas and oil, consumer credit advertising, and Iran.
Energy: Petroleum Gas and Oil
The Lord Bishop of St Albans: To ask Her Majesty’s Government how they intend to ensure the continuing affordability of liquid petroleum gas and oil for those households which are not on mains gas supply.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma): Her Majesty’s Government is acutely aware of the difficulties people have experienced with the price of liquid petroleum gas and heating oil. The price of LPG and oil is influenced by a range of factors, including crude oil prices (the major factor), refinery capacity, stock levels, distribution costs and retail margins.
Continue reading “Energy, Consumer Credit Advertising and Iran – Written Questions”
The Lord Bishop of St Albans: To ask Her Majesty’s Government, in the light of the Ofcom’s publication Trends in Advertising Activity—Payday Loans, published in December 2013, what assessment they have made of the impact on children between four and 15 years old of the number of payday loan advertisements to which they are exposed.
The Lord Bishop of St Albans: To ask Her Majesty’s Government, in the light of Ofcom’s publication Trends in Advertising Activity—Payday Loans published in December 2013, what assessment they have made of the increase in the number of payday loan advertisements watched by children aged four to 15 years old over the past four years; and whether they have any plans to address the situation.
The Lord Bishop of St Albans: To ask Her Majesty’s Government, in the light of Ofcom’s publication Trends in Advertising Activity—Payday Loans published in December 2013, what assessment they have made of the frequency and impact of payday loan advertising viewed by children on non-children’s television channels.
The Lord Bishop of St Albans: To ask Her Majesty’s Government, in the light of Ofcom’s publication Trends in Advertising Activity—Payday Loans published in December 2013, whether they plan to commission research into the impact of payday loan advertisements on young peoples’ attitudes to the responsible use of money.
The Commercial Secretary to the Treasury (Lord Deighton): Payday loan adverts are subject to the Advertising Standards Authority’s strict content rules. The ASA will not hesitate to ban irresponsible adverts, and has a strong track record of doing so.
The Broadcast Committee of Advertising Practice (BCAP), the body that writes the Broadcast Advertising Code, is considering Ofcom’s research and the extent to which payday loan advertising features on children’s TV, and whether there are any implications for the ASA’s regulation of this sector.
Separately, the Financial Conduct Authority is consulting on new rules for consumer credit adverts, including proposals to introduce mandatory risk warnings and signposting to debt advice. It has powers to ban misleading adverts which breach its rules.
On 11th December 2013, Lord Selsdon asked Her Majesty’s Government what steps they are taking to regulate the issue of payday loans to those without a regular income.
The Bishop of Truro asked a supplementary question:
The Lord Bishop of Truro: My Lords, what consideration, if any, has been given to introducing a real-time database of payday loans in order to ensure that the proposed FCA rules can be properly monitored and enforced and, in particular, to avoid the problem—a special one at this time of year—of people being able to take out multiple loans from different companies at the same time?
Lord Newby: My Lords, a real-time database is one of the things that the FCA will be looking at. In some of the countries and US states where they have effective caps on the cost of payday loans, such systems have been seen to work efficiently and be very effective.
On 9th December 2013, the Bishop of Birmingham spoke in favour of a number of amendments to the Financial Services (Banking Reform) Bill, during its Third Reading. The amendments related to new powers being given to the financial regulator to regulate the payday loan industry. There was also a division on one of the amendments debated – more information can be found here.
The Lord Bishop of Birmingham: My Lords, I take a moment to thank the noble Lord, Lord Lawson, for his kind remarks about my friend the most reverend Primate’s speech last Thursday. I shall pass that on to him. He regrets that he is not in his place today. He is presiding over a whole number of bishops—it amounts to about the number of noble Lords in your Lordships’ House tonight—up in York.
Continue reading “Bishop of Birmingham supports faster implementation of payday lending regulation”
On 24th October 2013, the Bishop of Derby, the Rt Revd Alastair Redfern, received an answer to a written question on the development of credit unions.
The Lord Bishop of Derby: To ask Her Majesty’s Government what steps they are taking to support credit unions as viable alternatives to payday lenders and other providers of high cost credit.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): While the majority of credit unions are not providing direct competition to payday lenders, credit unions are increasingly helping members who have become trapped with payday loans, offering them a way to consolidate and escape from the high interest rates, spreading out their debts over a longer, more affordable period.
Government has committed investment of up to £38 million in credit unions — to increase access to affordable credit for at least 1 million more people and save consumers up to £1 billion in loan repayments by March 2019.
We are also changing the maximum interest rate credit unions can charge per calendar month from 2% to 3%, coming into force on 1st April 2014.
This will enable credit unions to break even on their smaller, most expensive to issue loans, and to become more stable over the long term. This will give low income consumers greater access to reliable, affordable credit, without having to resort to more expensive means, such as home credit or payday lenders.