Labour MP Stella Creasy has been campaigning long and hard to more strongly regulate the instant cash loan industry in the face of new research results that indicate at least 2 million Brits possibly using instant cash loans.
The research survey polled more than 2,000 people in the UK, finding that only 3 per cent of respondents had availed themselves of the types of short term loans provided by payday lenders. However, with cash shortfalls expected to grow over the next six months, the research findings suggest that twice that figure could end up looking for quick loans to help make ends meet.
The report found that many households in he UK have been experiencing increased financial hardship, as benefit cuts and tax increases have impacted their ability to meet the costs of paying mortgages, credit cards, and bank loans. Consumer Focus produced a report last year that went into even more detail, revealing how much convenience the instant cash loan industry brings to consumers, with nearly instantaneous fund transfers and offering the ability to customers to avoid traditional high street lenders or having to resort to borrowing from friends and family.
The Consumer Focus report also found that the use of instant cash loan providers in the US, which is where the industry first grew to prominence before moving to the UK, actually helped to prevent financial crisis in some cases and also managed credit flows in the short term. Meanwhile, two US states that instituted rate caps on payday lenders experienced higher bankruptcies and more debt problem complaints, the report also found.