Weekly payday roundup: 7 days ended 13 July 2013:
A new survey says that 1 out of every 20 families in the UK falls under the payday loan curse, but there’s hope: some people are banding together to fight.
A new, shocking report from Aviva revealed the figures just this past week, uncovering how 5 per cent of British families have had to rely upon high interest rate short term loans for any number of reasons, whether it be emergency funds for an unforeseen occurrence or help purchasing necessities such as food. Even worse, the survey found an additional 3 per cent of families have been using pawnbrokers in much of the same way, raising the total figure of families in financial need – and most likely in shedloads of debt – to at least 8 per cent.
However, there is a bit of a silver lining to this dark cloud in that there are groups of people banding together across the UK in an attempt to stop the reach of these payday advance lenders, especially considering how horrid it is to be in the grip of a payday loan. I read about one group of young mothers from Swansea that has taken things into their own hands to campaign against the lenders by contacting their local parliament members.
The nine Welsh mums, who know all too well about how payday lenders can harass and intimidate borrowers, are urging other young women nearby to join forces in order to strengthen their voices. In all honesty I can only hope that this group, and others across the UK, continue to grow in members and become so powerful that the politicians in Parliament can no longer ignore them, leading to real change.
For what it’s worth I don’t know why the Government is so bloody recalcitrant when it comes to instituting a payday lending interest rate cap. Yes, there are some that fear rate caps will force lenders to become much more picky as to who they provide their instant cash loans and that this will result in a reduction of access to credit to those who need it the most, but you can’t tell me that lenders such as Wonga that charge well over 5,000 per cent APR should be completely and totally unregulated?
Listen, I hate looking across the pond to the Yanks but there’s some very strict laws over there when it comes to payday loans, and their interest rate caps are quite low. This hasn’t had a deleterious effect on the industry over there, so can we just get over our fears and realise that this is just posturing on the part of payday lenders that are afraid we’re about to kill their cash cow?