Lenders will also have to display a risk warning on television signposting consumers to the Money Advice Service to get debt help.
Since the FCA assumed control of the sector on April 1 payday lenders have had to display a warning message on emails, online and in texts.
The message, which reads ‘Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk’, has now been extended to television.
The scrutiny on payday lending intensified last week when it emerged that Wonga sent letters to customers threatening legal action from bogus law firms, seemingly designed to scare them into paying up.
Rob Ashley-Roche, principal of Rest Assured Mortgages, said: “There’s a place for payday lenders, but in my opinion they got greedy and expanded from what they are which is the last-stop-shop from somebody in serious financial trouble by trying to move into the prime market.”
The Financial Conduct Authority will also discuss capping the overall cost of payday loans this summer.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, which represents short-term lenders, suggested that regulation could get too extreme.
He said: “Through the voluntary rules that we put in place in 2012, the CFA's members have been working towards the FCA's rules for many months and are fully committed to meeting them.
“The industry has already changed significantly for the better and short-term lenders are now leading the way through initiatives such as real-time credit checks.
“However, over regulation is a real risk. Lenders are facing the prospect of a government price control before the full impact of new regulations is known.
“Borrowers consistently tell us how much they like and value short-term credit but if the regulator turns the screw too far and drives reputable lenders out of the market, these borrowers will be forced to look for credit elsewhere and this creates a perfect market for illegal lenders.”
