The UK Financial Conduct Authority (FCA) has officially taken responsibility to regulate the £200bn consumer credit market, in a bid to provide better protection for credit cardholders having an overdraft or loan.
The move by FCA will ensure that all the 50,000 businesses that offer credit to the UK consumers will now comply with its rules and regulations.
FCA CEO, Martin Wheatley, said their job is to make sure firms put their customers at the heart of their business and not see them as an easy target or a profit line.
"We won’t shy away from taking tough, decisive action to make sure that the people who rely on these products are treated fairly. There will be some firms that don’t get the message, or won’t play ball, those firms should know that we won’t let them carry on," Wheatley added.
FCA has also revealed the results of its research conducted by the Government’s Money Advice Service (MAS), which showed that nine million Brits were in serious debts and facing problems with debt and only 1.5 million have sought debt advice.
The research also revealed that 1.8 million people were not even aware of their debt.
Wheatley said many people use credit in some shape or form and the majority manage their finances well, but there is a significant number who rely on credit as a means to an end.
"Last Christmas over a million people planned to use a payday loan to help with their bills, so the need for transparent and effective regulation of the sector is clear," Wheatley added.