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!

Well, it’s official: the University of East London has cemented itself as my favourite institute of higher learning after banning all payday loan adverts.

It’s also the only university in the UK to do so, which is even more reason to rejoice: finally someone’s standing up for university students and taking steps to prevent payday advance lenders such as Wonga and QuickQuid from preying upon younger Brits that both have need of extra cash and lack the world experience to necessarily know how pernicious payday lending can be. Payday loans often boast massively high annualised interest rates – Wonga can charge as much as 4,214 per cent APR, after all – and while payday lenders object at using an APR to represent a loan that lasts only a few weeks at most, the cost is still incredibly high, even if you manage to repay a payday loan on time and without incurring any late fees.

Out of its 28,000 students, UEL said 2,000 of them had dependent children, and the National Union of Students says that these types of students are one of the most likely to end up being ensnared by a payday lender. This was the main impetus behind the university’s decision to launch heir anti-payday lending campaign, said one UEL spokesman, and the vice president for the National Union of Students was very gratified to hear about the announcement.

Peter Mercer, the vice president for NUS, said that payday lenders like to pass themselves off as a viable alternative to a student loan, but you shouldn’t be fooled by this. Short term loans almost always do nothing except make matters worse when it comes to debt, Mr Mercer added, and with so many disreputable lenders out there specifically targeting low income earners and students, taking steps to eliminate adverts for their services from university campuses across the UK will help stave off dangerous levels of debt.

And let’s face it: debt problems in the UK are getting worse.  You don’t need me to tell you that, as all you need to do is look at how many people have been contacting National Debtline.

In fact, a news report I read this week said that there were nearly twice the number of payday loan-related debt troubles addressed by National Debtline in 2012 than there were the previous year. Specifically, the number of payday loan calls fielded by the free advice service increased by 94 per cent to 20,013 – and that if you looked at 2007 figures, the number of callers with payday loan debt had gone up an absolutely staggering 4,200 per cent!

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!

Thanks to impending welfare and benefit reforms, the number of households sinking into debt is more than likely to skyrocket sometime in the immediate future.

That’s what debt charities have been saying recently, as these organisations look ahead to the bleak economic landscape stretching ahead of us to the horizon. Unfortunately, the likelihood of lower income earning families – the very same households who rely upon benefits in order to help meet ends – are going to be hung out to dry thanks to the changes; the results will likely be bad as countless households begin to flock to expensive, high cost payday lenders like Wonga and QuickQuid in an attempt to squeak by from month to month.

And make no bones about it, debt charities say: payday loan related debt is absolutely on the rise already. Payday loan debt related problems have doubled just over the course of 2012 – even wore, the last four years have seen a massive tenfold increase!

Citizens Advice in particular is quite worried, and it has ample reason. Only 1 per cent of its clients had payday loan debt in 2010, yet 2012 saw this figure raise to 4 per cent – and today so far the figure stands at an absolutely astounding one out of every ten.

Meanwhile, things are only going to get worse, says the debt charity, once the April benefits cap goes into effect and some 67,000 Brits will have £83 less every week to help them meet ends on average. Meanwhile, housing allowance changes that will penalise households by up to 25 per cent for having as many as two spare rooms in their home could cripple as many as 670,000 of the most vulnerable British families.

This will most likely cause a massive storm of debt as people end up scrambling to pay their bills, especially when they were just barely making it beforehand. The allure of instant cash loans from payday lenders may be too much for these vulnerable households, and while the short-term benefits of a payday loan may be an excellent way to meet a sudden, one-time expense, payday loan related debt is absolutely unsustainable in the long run and will lead to even more debt for even more families.

In a decision that was supposedly to make the bankruptcy system in Scotland help pay for itself, the fees for becoming bankrupt were increased from £100 to £200 in June of last year. However, this has led to absolute shedloads of financially crippled Scots having to finance their bankruptcy fees by turning to the only lender they can – a payday advance provider.

£200 may not sound like much, considering it can be hundreds of pounds more south of the border, but for cash-strapped Scots approaching financial ruination due to out-of-control debts, even the relatively low bankruptcy fee of £200 might as well be £2 million in that either way it would be impossible to scrape up that kind of cash. Of course, someone who needs to declare their bankruptcy couldn’t possibly qualify for a loan from a traditional lender, considering the most likely massive debts they’ve incurred and the absolute shambles their credit history most likely is, opening the door for the moustache-twirling villains of the lending world – those pernicious purveyors of high interest rate short term loans – to get their claws into just a few more victims.

As if this wasn’t bad enough, there’s rumours swirling about of an a new draft to an insolvency bill that would leave bankrupts that have to borrow from a payday lender still responsible for the debt even after paying their bankruptcy fee. The language of the draft includes a clause which excludes any debts from being written off if they are incurred up to a few weeks prior to the bankruptcy filing, which would start off a new bankrupt with a nice, big, fat bit of unsustainable debt to deal with even after they scraped up the cash to get rid of the monkey on their back in the first place; hardly seems fair, does it?

New research revealed this week that payday loan providers are benefiting from the massive overdraft charges high street banks charge to their customers.

Everyone who’s anyone knows that taking out a payday advance can be an incredibly painful experience, especially when it comes to repaying the loan. Lenders such as QuickQuid and Wonga can charge more than 4,000 per cent in annualised interest on their loans, making it a very pricey proposition for borrowers – yet it’s come to light that these high interest rate short term loans are actually a bargain when it comes to overdraft charges on bank accounts in the UK!

A new investigation has revealed that you could end up paying the equivalent of an absolutely incredible 53 million per cent annualised interest rate on the use of some overdraft facilities. In fact, dipping into an overdraft on your current account in order to borrow £200 over a period of ten days would cost you three times the amount in fees as it would if you went to even the most expensive payday lender out there, and industry experts say such ridiculous fees are driving untold numbers of cash-strapped Brits right into the arms of predatory payday loan providers.

In fact, the use of unauthorised overdraft facilities generate around £2 billion on a yearly basis for the banking industry, according to an Office of Fair Trading report that was released last week. Debt campaigners are positively up in arms over these revelations, with Move Your Money’s chief executive Laura Willoughby remarking that it’s a case of ‘out of the frying pan and into the fire’ with individuals experiencing financial distress, adding that High Street is simply selling its customers short and condemning them to the heartbreak of being caught up in payday lending-related debt – which is notoriously difficult to clear.

The nerve of these high street lenders. It’s not enough that they offer savers terrible rates of return and shut down nearly every borrower that approaches them for a traditional loan – now they’ve got to ruin people’s lives even further by making payday lenders look good in comparison!

With this week marking the one-month anniversary of Christmas Day, campaigners warn that festive season debt from payday loan providers has come home to roost.

If you took out an expensive payday advance the week of Christmas, you’re most likely required to repay the loan this week, according to Coast & Country, a social housing provider. In fact, C&C found that 24 December is traditionally the day most often cited as one where high interest rate short term loans feature heavily. A large proportion of people were paid that day, leading to a long five and half weeks until their next pay cheque on 31 January.

The Teesside-based housing and regeneration firm said that it wanted to draw attention away from large scale television advert campaigns such as those kicked off by lenders such as Wonga and QuickQuid during the festive season and beyond. Instead, C&C’s chief executive Iain Sim said that borrowers should look into less expensive borrowing solutions such as credit unions, especially since the cost of living seems to be constantly on the rise and households are also facing struggles meeting ends, what with the costs of electricity, gas, food, and petrol continue to run rampant.

January is even more dangerous than most months when it comes to household finances, remarked Mr Sim, as so many individuals may have taken out payday lending in order to finance their festive season spending. However, with interest rates on payday loans resulting in such large fees at repayment deadline, many households find themselves in hot water when it comes to clearing their payday related debt and also paying the rest of their regular monthly bills.

However, turning to a credit union may indeed be the answer for many, especially since it is guaranteed to be much less expensive to take out a loan from such a lender. Credit unions are bound by law to only charge 2 per cent in monthly interest or less on all their loans, after all, which means that repaying a credit union loan is much less painful than repaying a payday loan!

The boss of one Ilkeston-based credit union says that the dangers posed by providers of short term loans are quite real and should be avoided at all costs.

Seamous Grant, the stalwart leader of Erewash Credit Union, has spoken out against the growing – and quite distressing – trend of local residents seeming to attract terrible levels of unsustainable debt more and more by taking out high interest rate short term loans from disreputable, predatory lenders. In fact, Mr Grant remarked that the credit union is seeing more loan applications than ever before for the month of January, most likely due to the rampant Christmas spending debt accumulated by local households falling victim to the siren song of payday advance lenders promising fast cash and instant loans for all their festive season shopping needs, only to attempt to suck these poor residents dry with their massive interest rates and late fees when it comes time to repay the loan.

The differences between loans sourced from credit unions in comparison to those from your typical payday loan provider are simply night and day, Mr Grant remarked, especially when it comes to paying interest on the loan. Unlike loan providers like Wonga and QuickQuid that charge annualised interest rates in the four figures – Wonga alone charges 4,214 per cent APR – credit unions are bound by law to charge no more than 2 per cent every month in interest to their customers.

Still, residents are turning to these very same payday loan providers in greater numbers than ever before, as evidenced by the number of loan applications the credit union boss has seen this January. It used to be that the beginning of every year was relatively peaceful and serene, said Mr Grant, but now Erewash is awash with nervous borrowers looking to find a way out of their payday loan debt.

It seems bad, but it’s absolutely true: a payday advance lender has enlisted the aid of singer/spendthrift Kerry Katona as an advertising spokesperson, despite the fact that she had a very well-publicised bankruptcy hearing in 2008. Truth be told the woman does discuss her money problems during the adverts, but with it being common knowledge by now that the best place to go if you’re facing massive financial problems is a debt advice charity and not a provider of high interest rate short term loans, it seems like a poor fit for just about anyone that doesn’t have their head lodged squarely up their own bum.

The company that the once-and-future ‘Atomic Kitten’ member is now apparently sticking up for – despite her own financial troubles in the past – isn’t perhaps the worst and most egregious lender out here. Unlike industry leader Wonga, which charges 4,214 per cent APR interest on its payday loans, this firm ‘only’ charges an annualised interest rate of 2,670 per cent – an improvement to be sure, but it still translates to around £29 on average for every £100 borrowed – and with a maximum loan of £300, you’re paying back around £87 in interest alone; hardly an inexpensive lending option!

Right now it remains to be seen who’s the bigger fool at the moment – Kerry Katona or her new advertising client – but one thing you can be sure of: this could only encourage more people, especially fans of the singer and reality television star, to seek out payday lenders and end up mired in debt. The economy is still not growing at a rate that will lead to better financial conditions for a large number of Brits, leaving households short of cash nearly every month, but racking up even more debt through a payday loan provider is never the answer; in fact it’s just going to make matters worse, and you’re not doing yourself any favours by following in the footsteps of someone whose main claim to fame is winning a celebrity television competition.

The Office of Fair Trading has to stop dragging its feet and put the irons to the payday lending industry before more Brits fall into debt, one MP has urged.

This week, staunch critic of payday advance lending Labour MP Stella Creasy has said the OFT’s irresponsible lending guidance is much too weak when it comes to keeping providers of short term loans in line. With an increasing number of Brits being raked over the coals of unsustainable debt, Dr Creasy says these financial difficulties are only being helped along by overly permissive OFT guidance.

It’s true that the Government amended the Financial Services Bill last month to provide the soon to be created Financial Conduct Authority the power to cap interest rates on short term lending such as payday loans. However, the Labour MP said that with the FCA’s creation not slated until 2014, something must be done now to begin reining in problem lenders – and that the OFT needs to take the matter well in hand – and that can be accomplished by strengthening its guidance on irresponsible credit prices.

Delaying action until next year would provide prime opportunities for the payday lending industry – a market Dr Creasy referred to as ‘legal loan sharks’ – to positively rake in massive loads of money whilst dragging low-income earning Brits deep into debt, the Labour MP said. However, this kind of activity can easily be curtailed if the OFT would simply srengthen its guidance concerning irresponsible lending this year in order to provide at least some measure of protection for vulnerable individuals ahead of the creation of the FCA.

Dr Creasy urged the OFT to send a clear message to payday lenders by updating and strengthening their guidance, as it would not only protect Brits this year but also set the standards for the new watchdog as it goes into effect next year. The Walthamstow MP also said she would like to see the OFT to make it a requirement of payday loan providers to keep records of every payday loan they agree to by using a centralised register in an effort to increase transparency and accountability within the sector.

The MP for Walthamstow, who fronts the payday loan campaign group Sharkstoppers, also wants the OFT to require all payday lenders to record all the loans they make in a central register to make them more accountable and transparent.

She says: “The problems with this lending are not only caused by the high costs associated with it. Some borrowers can end up taking out multiple loans, and many lenders make a virtue of the speed of their credit checks.

“To make lenders responsible for the amount they offer and the consequences of borrowing, the OFT should require all lenders to report all loans made to a real-time credit register at the very moment they provide the loan.”

She is also calling for a reform in the way lenders use continuous payment authorities, where you give your card number to a company for it to take regular payments. Unlike direct debits, CPAs can vary in amount and there is no set date when the money can be taken.

The OFT issued its irresponsible lending guidance for payday lenders in March 2010 and updated it in February 2011.

It states creditors should not use “misleading or oppressive behaviour” when advertising, selling or seeking to enforce a credit agreement and should make a “reasonable assessment” of whether a borrower can afford the repayments. It also states lenders should treat borrowers fairly if they experience payment difficulties and make sure they fully understand the overall cost of the credit.