A CLAMPDOWN on payday lenders which will see an end to firms approving loans in as little as 10 minutes has been announced by the City regulator.
New curbs proposed by the Financial Conduct Authority (FCA) will also limit the number of attempts payday firms can make to claw back money from a borrower's bank account.
The lenders will be forced to place "risk warnings" on their promotions and advertising, urging consumers to think before taking on a payday loan. The watchdog has powers to ban adverts it thinks are misleading.
The proposed rules, due to come into force next year, aim to combat soaring com-plaints about the £2 billion sector, which has doubled in size in the past few years.
Payday lenders will have to carry out stricter checks to ensure borrowers can afford to take loans out and they will only be able to roll a loan over twice, to stop consumers sinking into a spiral of debt.
Martin Wheatley, chief executive of the FCA, said the plans will put a stop to some consumers being able to get the go-ahead for a loan in 10 minutes. He said: "Arguably, 10 minutes to get money for people who may not have the ability to repay is too short in any case."
The FCA also plans to limit the number of unsuccessful attempts lenders can make to try to take money from borrowers' bank accounts to two.
Russell Hamblin-Boone, chief executive of the Con-sumer Finance Association, which represents short-term lenders, said more people would turn to illegal lenders if the cost of credit were capped.
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