WIREDGOV

Citizens Advice has responded to the Church of England's plans to compete with payday lenders by supporting credit unions.

Citizens Advice Chief Executive Gillian Guy said:

"The harmful impact of unscrupulous payday lenders is undeniable. We have recently seen a report where a borrower facing staggering debt contemplated suicide. With 87% of payday lenders failing to check if borrowers can afford to repay their loans, payday lenders are trapping people in cycles of never-ending debt – a far cry from their responsibility to treat their customers fairly.

“We know there’s a real need for small, short-term loans. When household budgets are tight, an unexpected expense like a broken washing machine or a burst pipe can mean that people need to borrow a small amount of money at very short notice.

“Credit Unions can be a great option for some people, so it’s good news that the Church of England is planning on boosting them. But at the moment, Credit Union’s can’t meet all the demand for short-term credit. We need a responsible short-term credit market that treats its customers fairly, and we want to see banks stepping up and offering short-term micro loans to their customers to fill this gap in the market.”

Citizens Advice

Notes to editors

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, 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 information in England and Wales see www.citizensadvice.org.uk
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality. For online advice and information see www.adviceguide.org.uk
3. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 6.9 million problems from April 2011 to March 2012. For full 2011/2012 service statistics see our quarterly publication Advice trends
4. Out of 22 national charities, the Citizens Advice service is ranked by the general public as being the most helpful, approachable, professional, informative, effective / cost effective, reputable and accountable (nfpSynergy’s Brand Attributes survey, May 2010).
5. Most Citizens Advice service staff are trained volunteers, working at around 3,500 service outlets across England and Wales.