With the recent downturn in the UK economy, many consumers have found that their only source of borrowing has been payday lenders in the UK. Because the majority of payday lenders in the UK are members of the Money Act scheme, these lenders are not allowed to charge higher fees or interest rates than is legally permitted. The Money Act regulates the lending in the UK and ensures that the consumer is protected from unscrupulous lenders who can cheat people out of their money and cause them serious financial problems. However, as the recession has affected many other areas of the economy, payday lenders in the UK are feeling the pinch as well, and are often unable to cope with the increased demand for their services.

As well as being members of the Money Act scheme, payday loans in the UK are also subject to many additional regulations and rules that are put in place by the FSA (Financial Services Authority). For example, payday loans in the UK must not charge over the paydayloansnow.co.uk amount of a normal payday loan or charge interest rates that are higher than those of regulated lenders in the UK. They must also not ask for up front fees or charge a penalty for a late repayment, before they give the borrower access to the money that is needed. And because of the many rules that the FSA has put in place, payday loans in the UK are now subject to the most stringent controls of any type of financial product.

Because of these new regulations, payday loans in the UK have faced fierce competition over the last few years. Whilst many lenders still operate relatively freely, a tiny number of lenders have completely disappeared, largely due to a lack of business. In addition, the rise of payday loans companies in the country has resulted in prices rising, which has deterred many would-be borrowers from applying. This has led many people to rely on cheaper borrowing options such as personal loans and credit cards to get their money in time for their next pay day.