Weekly payday roundup: 7 days ended 8 mar 2013:
Payday advance lenders have become more or less universally reviled, with debt advice charities and MPs alike all coming together to condemn payday loans.
Let’s be honest – this renewed focus on pointing out the evils of high interest rate short term loans simply can’t happen soon enough, thanks to the proliferation of cash shops and purveyors of payday loans online. In fact, the Belfast office of Citizens Advice Bureau recently said that, over the last 12 months, the number of local residents seeking help with payday loan related debt grew by 410.
Around 470 people helped by the local CAB said that they had concerns about the debt they were saddled with, and with a total of 4,700 consumers helped in 2012, last year’s figures not only dwarfed the 60 payday loan related calls the CAB received in 2011. On top of that, around one in every ten of those looking for debt relief last year featured a payday loan problem, according to CAB figures.
Meanwhile, local politicians from Derry have also drawn attention to the issues surrounding payday lenders by welcoming new moves by the Office of Fair Trading, which recently issued a 12-week period of time for 50 payday loan providers to clean up their act or run the risk of having their licences taken away from them. Mark Durban, MP for Derry, said that it was high time that these less-than-honest payday lenders were put in their place, especially since so many local residents have ended up falling victim to unsustainable levels of debt by being enticed into taking out payday loans.
MLA Colum Eastwood, Mr Durban’s SDLP colleague, echoed his sentments, remarking that the move as a long time coming. Mr Eastwood said that it’s all too common to have people running into cash flow problems in the current economy, which makes it all the more important to ensure that any sub-prime lenders such as payday loan providers are regulated within an inch of their lives in order to prevent even worse debt from getting people in a stranglehold.
I find myself completely agreeing with both Labour politicians in that it’s long overdue for the OFT to throw the book at these legalised loan sharks. I mean let’s get serious for a moment: in what bizarre world should lenders such as Wonga and QuickQuid be allowed to charge such extortionate interest rates to their customers without any sort of oversight?
It’s absolutely mad for lenders to just run roughshod over consumers in the UK, and I think it’s about time that the OFT started throwing their weight around. If a few necks get stepped on in the process, all the better, if you ask me!