The Consumer Finance Association has accepted four major payday lenders as members.
The move means membership of the CFA has doubled in the last twelve months and represents between 60-70% of the payday market.
As a condition of the new members – Cash & Cheque Express, Cash on Go (trading as Peachy), Next Credit and Think Finance UK Ltd (trading as Sunny) – all had to demonstrate compliance with the stringent standards set out in the CFA’s Code of Practice.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, said: “Increasing the CFA’s membership is good news for the government, the regulator and more importantly for consumers because these businesses join our existing members in meeting the high standards of our code of practice.
“With some less reputable lenders dragging down the whole sector, it is important that the CFA and its members can set itself apart and help consumers to borrow safely and with confidence.
“The CFA has been resolutely focused on protecting borrowers and the progress we have made in raising standards has been publicly acknowledged by Jo Swinson MP, the minister for consumer affairs, debt charities and in the media. So we are delighted to extend our reach further into the market by welcoming these four new members.”
The CFA’s Code, which came into force in November 2012, includes specific consumer protection measures including:
• enhanced affordability assessments;
• limiting the number of times a loan can be rolled over (3 times) to prevent short-term loans becoming long term debts;
• and specific help for those that find themselves in financial difficulty such as freezing the interest and charges, arranging extended repayment plans and providing time to get their financial affairs in order.
The CFA’s Code is independently monitored and audited to ensure that its members are meeting the standards it sets out.