One MP in Derry has recently criticised instant cash loan providers in Derry, calling the lenders ‘predatory’ and little better than ‘legal loan sharks,’ according to payday advance industry experts.
Mark Durkan, MP for Foyle, accused purveyors of no credit check loans of exploiting the difficult circumstances facing many today due to the current economic landscape and locking them into extortionate and ever-escalating interest rates. Mr Durkan’s words come on the heels as the Citizens’ Advice Bureau reported an uptick in the number of people in Derry usingsuch loans, a figure the CAB found ‘worrying.’
Money advice supervisor for the bureau, Liam Doran, said that 12 months ago, only around one out of every ten people who came to him had taken out short term loans for bad credit histories. However, this year, the bureau said this figure has risen to between 25 and 50 per cent.
Dove House community group advice worker, Kathleen Bradley, also commented on the situation, claiming that the high-interest lenders of Derry were being permitted to profit from those suffering the most from the recession. Advice workers have said that the current dilemma is one of a ‘vicious circle,’ with static welfare payments, stagnant or declining wages, increased unemployment, and increased living costs leading to more and more individuals deciding to turn to high interest loans in order to make ends meet.
In a case of robbing Peter to pay Paul, many indebted individuals on low incomes or benefits have admitted to Mr Doran that they have had to take out more than one instant cash loan in order to make the repayments on an initial loan. Interest rates spiral on rolled over loans, with some firms operating out of the Derry region are reportedly charging more than 1,000 APR in these instances.