Payday lenders set debt-trap for struggling families
22 Apr 2014 03:10 PM
With one in four people coming
to Citizens Advice with a debt problem, the charity highlights the financial
struggles families are facing.
Citizens Advice Chief Executive
Gillian Guy said:
“Payday lenders have set a
debt-trap for struggling households. In the battle to make ends meet
people are turning to short-term loans just to get by. A lack of checks,
high interest rates and fees means what is supposed to be a quick fix turns
into a long term nightmare.
“It’s not just
payday lenders that are preying on the worst off. Citizens Advice expects
up to 60,000 log book loans to be taken out this year – 61% more than in
2011. The industry brings together the worst of payday lenders and
bailiffs with its threatening tactics, high interest rates and failure to check
if people can afford to repay loans.
“People need more options
for short-term credit. There is a gaping hole in the market which allowed
the boom in payday loans. The time for a responsible alternative in the
form of a micro-loan is long overdue."
“It is important creditors
pay to help people who are in debt. The FCA levy on consumer creditors
should add to money for debt advice via the Money Advice Service, not be used
to reduce the amount existing contributors have to
give.”
Recent analysis from the charity
shows that money worries are affecting those in and out of work. People
who are self-employed are just as likely to seek help from Citizens Advice with
a debt problem as those who do not have job. Just last week the latest
employment figures revealed self-employment had hit an all-time
high.
One in four of people who come
to Citizens Advice for help have a debt problem.
Citizens Advice
Notes to
editors:
- Citizens Advice calculated
that logbook loans could reach up to 60,000 this year by
multiplying the number of loans registered in the first two months of this year
by six, to give a twelve month estimate.
- This year the Citizens Advice
service celebrates its 75th anniversary. We’ve planned a year of activity
running from January to December 2014. Contact the press office to find out
more.
- The Citizens Advice service
comprises a network of local bureaux, all of which are independent charities,
the Citizens Advice consumer service and national charity Citizens Advice.
Together we help people resolve their money, legal and other problems by
providing information and advice and by influencing policymakers. For more see
the Citizens Advice
website.
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- To find your local bureau in
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atwww.adviceguide.org.uk
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Welsh language speakers
- Citizens Advice Bureaux in
England and Wales advised 2.1 million clients on 6.6 million problems from
April 2012 to March 2013. For full 2012/2013 service statistics see our
quarterly publication Advice trends
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are supported by more than 22,000 trained volunteers, working at over 3,000
service outlets across England and Wales.