Exactly about cost limit protection against expensive pay day loans

Research for the Financial Conduct Authority resulted in a cost cap for payday advances – protecting significantly more than four million payday loan clients from exorbitant interest costs.


  • Dr John Gathergood worked utilizing the Financial Conduct Authority (FCA) to try the entire world’s largest study regarding the behavior of households which use payday solutions, ultimately causing tips for establishing the amount of a loan cost limit.
  • FCA credit rating policy ended up being shaped because of the research, helping protect 4.3 million folks from reckless loan techniques in the united kingdom. Brand brand New FCA laws arrived into force in January 2015, restricting interest and costs on pay day loans to 0.8percent each day and introducing brand new criteria for affordable credit.
  • One 12 months following the introduction regarding the policy the sheer number of payday loan providers dropped from 400 to below 150. The firms that are remaining through the market.
  • The number of loan-related problems handled by Citizens Advice dropped by 50% within three months of the regulations coming into force.

” In my view John Gathergood is, without peer, great britain’s leading specialist in the economics of credit rating areas. He’s an important partner for the FCA now plus in the long term. John has demonstrated which he provides, when it comes to engaging and useful research production and top-quality interaction of this findings, into the context of the practical policy organisation. ” (Dr Stefan search, Head of Behavioural Economics and information Science, Financial Conduct Authority)

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