British regulators are imposing tougher rules, promising more rigorous oversight, and a crackdown on shady practices, in the payday lending sector, and the consumer credit industry generally.

The UK’s Financial Conduct Authority (FCA) announced that it will adopt final rules for the £200 billion per year consumer credit market, which includes approximately 50,000 firms, as of April 1. The new rules will include mandatory affordability checks for payday borrowers, and they’ll give the FCA the power to ban any misleading ads by payday lenders.

The FCA says that it will take a tough approach to consumer credit with stronger powers to clamp down on poor practices. “Our supervision of firms will be hands on and we will closely monitor how providers treat their customers, in particular those operating in higher risk sectors such as credit cards, debt management and payday,” it says, adding that there will be penalties for any firm or individual found not to be putting consumers’ interests first, including possible enforcement action and consumer redress.

The rule changes will give consumers additional protection from “rogue practices”, it says, and put the onus on credit providers to ensure that they treat customers fairly at all times. Among other things, the rules will limit loan rollovers; require firms to provide information to customers on how to get free debt advice; require debt management firms to pass more money on to creditors from the start of a debt management plan, and to protect client money.

Additionally, the FCA says that firms that do higher risk business, and pose a potentially greater risk to consumers, will face more intense and hands-on supervision. It will also ensure that any firm or individual authorised to do consumer credit business is fit and proper, and that firms have suitable and sustainable business models. And, its dedicated supervision and enforcement teams will crack down on poor practice, money laundering and unauthorised business, it says.

“Millions of consumers access some form of credit each day, from paying for everyday goods by credit to taking out a payday loan. We want to be sure that the market works well when people need it – whether that’s for one day, one month or longer,” said Martin Wheatley, the FCA’s chief executive. “Our new rules will help us to protect consumers and give us strong new powers to tackle any firm found to be overstepping the line.”