According to some debt charities, there are some payday advance lenders who refuse to work with them when it comes to resolving the debt of customers drowning under the weight of excessive interest charges.
The Consumer Credit Counselling Service is claiming that there are some providers of short term loans that can’t be bothered to even pick up the phone when debt counsellors ring them up on behalf of customers to discuss fixed rate instant cash loan repayment plans. CCCS representative, Una Farrell, said that there are too many lenders that make it difficult for borrowers to get into contact with them in the event that the customer has a problem with repayment, leading to massive interest penalties in many occasions.
Ms Farrell, who offers free debt management advice, added that many lenders will not accept fixed payment arrangements for customers to repay their debt at a manageable rate. The CCCS representative called the practice ‘ruthless,’ stating that there should be a concerted effort on behalf of borrowers and lenders alike to help get people out of debt.
The payday lending industry has struck back against the allegations, with the Consumer Finance Association’s John Lamidey remarking that the only lenders that are engaging in such activity must be very new and small lenders with little experience. The best lenders know almost intuitively that they are required to work hand-in-hand with debt charities to help people structure their debt, Mr Lamidey added.
Around one in seven adults in the UK have admitted to having problems with debt, according to the Co-operative Bank, whose research further found that one in every 20 turn to instant cash loan providers.