There are governing bodies in most Countries that regulate companies that lend money or give credit, in order to ensure that the lenders maintain a good lending practice. Such bodies exist to safeguard the consumers from the unscrupulous practices of various lenders and drainage of money from the wallets of the people. The UK is no different and there are govening bodies that exist to protect the customer, and short term lenders fall into that governance. As payday cash advances carry quite high interest rates, a consumer needs to be made aware. This is the reason why there are a few regulations that exist in relation to the payday loan lending companies in the UK.

In the UK, a license known as the consumer credit license must to be carried by all payday loan lending companies and this license will be issued to them by the OFT, or the Office of Fair Trading. A lender must hold a Consumer Credit Licence before they can offer loans to consumers. As well as the CCL, there are other requirements that a lender has to undertake in order to operate legally. The Government is receiving an increasingly large number of requests from the press to introduce the measures that would curb the worst excess of the payday loan lending companies, especially the high rates and rolling over of loan amounts.

There are some regulatory bodies that have started maintaining a close watch on the companies that offer payday loans to financially distressed consumers in the UK. For one, the British Cheque Casher’s Association has just issued a new code of practice to its members. However, this needs a mention that the membership to the BCCA is entirely voluntary and it deals with the high street payday loan lending companies only. Membership to the BCCA is not open to companies that operate solely online.

The Insolvency Practitioner’s Association have also raised concerns over the practice of short term lending. It is looking to set up a body to regulate all non FSA regulated financial operations. They will offer a kite-mark to the high quality companies as a sign of excellence and fair products and services. They hope that this will help consumers by giving a clear indication of a companies lending attitudes and standards.

One of the current problems with payday lending is that lenders are required by law to advertise their interest rates as an APR, which causes confusion as payday loans are not best compared by using an APR. Despite this, all lenders must make it clear to the customer what the APR is rather than the actual cost of the loan.

Payday cash loans is extremely useful financial products and can help a person meet his or her short term financial need. Although these short term loans have not been around that long, their popularity has become huge as people struggle to obtain credit due to the current economic situation where banks continue to refuse to lend properly. Thousands of people will be resorting to payday loans to manage their monthly finances, and instant credit bad credit loans are here to stay provided the lenders do not misbehave.