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Public Accounts Committee report

Date article publshed: 31/05/2013 Read original article >

The Public Accounts Committee (PAC) has published its report into the regulation of consumer credit.

The Times concludes that “One player comes out rather well from the report. Wonga…is cited twice and rather positively. It limits loan rollovers to three - a laudable policy that the committee recommends be adopted by all lenders. And it stops racking up interest on defaulters after 60 days - a limit the committee wants enshrined in legislation”.

Meanwhile, here is our statement in response to the PAC report:

“The PAC has identified a number of significant issues in the regulation of consumer credit, which have led to unscrupulous practices by some operators. We welcome the Committee endorsing some of our responsible lending policies and recommending they should become industry standards.

"We particularly welcome the PAC's statement that APR as a measure of the cost of loans is 'outdated and misleading' and should be replaced by a clear Total Cost of Credit (TCC). It's a move we have long called for and, if applied across all short term credit products including overdrafts, it would transform the market for consumers. Several studies have shown that many people are paying far more for traditional borrowing than for a Wonga loan. In the meantime, we will continue to work with the OFT and FCA to improve standards across the credit industry."

Wonga appeared as a witness before the Committee in January 2013.

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