Weekly payday roundup: 7 days ended 22 feb 2013:
Debt problems are rampant in the UK at the moment – with younger Brits hit especially hard by unemployment – yet there are some payday lenders expanding.
The news is rather bleak for anyone who isn’t lucky enough to have their own payday advance company, as one debt advice charity has warned that out-of-control unemployment is causing serious debt problems for the uder-25s in the UK. In fact, those under the age of 25 are hit much, much harder than older Brits when it comes to unemployment, causing them to rely on high interest rate payday loan providers such as Wonga and QuickQuid in droves, despite the fact that the consequences lead to massive fees and charges.
StepChange Debt Charity released a report this week announcing that one out of every three of its 22,262 customers under the age of 25 that sought aid last year remarked that their debt problems were triggered by unemployment. The 25-to-39 year old crowd didn’t find this nearly as problematic, as there were only 24 per cent of them reporting unemployment-triggered debt, and the 40 year old to 59 year old crowd only reported the problem 23 per cent of the time; for the over-60s, it was a thankfully low 10 per cent.
StepChange also reported that older people were much less likely to be out of work than anyone under the age of 25 seeking their aid. Only 30 per cent of the 25-to-39 age group – and 31 per cent of those in the 40-to-59 age bracket – reported unemployment, while 42 per cent of under-25s said they were not in employment, leading to a massive figure of nearly one million unemployed Brits between the ages of 16 and 24 by the end of last year.
Youth unemployment actually went up over the last quarter of 2012, according to the Office for National Statistics. Between the months of October and December last year, he total stood at 974,000 – an increase of 11,000.
So it’s obvious that unemployment – and the debt it can bring – is a serious problem right now. It would be nice to think that everyone is feeling the squeeze, but what if I told you that there’s some people actually profiting like mad from all this – to the point where their businesses are flourishing?
Well, it’s true: I hate to admit it, but one payday loan company based in Skipton announced that it’s going to be expanding even more, now that it’s sold itself to new owners from the United States. Dale Chapman, the founder of the payday lender and a former pawnbroker from Keighley, launched the lender back in 2001, and while it’s now owned by US-based Speedy Cash Corp, he’ll be staying on to run the company after the sale.
The firm provides payday loans online and provides jobs for around 150 staff, so I suppose it’s not all bad. Still, the number of people whose credit have been ruined by payday loans certainly outweigh the 150 people who’ve been profiting off the misery of others; I wonder how much money Chapman earned from the sale of his firm – and whether he’d be bothered to donate a bit of it to help debt advice charities like StepChange help people victimised by payday loan providers!