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East Lancs residents risk spiralling debt from payday loans
4:00pm Friday 25th April 2014 in News
A COMMUNITY group in Hyndburn has warned res-idents about the dangers of payday loans.
1stCall Hyndburn, a Big Lottery-funded project work- ing with young people in the borough, said an incr-easing number of people were reporting problems with payday lenders.
In the past six months, 83 per cent of 167 visitors surv- eyed said they had taken out some sort of high-int-erest loan, such as catal-ogue purchases, or payday loans.
Danny Cringle, project manager at 1stCall, in Cann- on Street, Accrington, said: “If somebody borrowed £100 from a payday loan company and just didn’t pay it back, seven years later they would owe more than the US national debt.
“Payday loan companies say they do not lend to people who aren’t working, or if they’re unable to pay back what they borrow.
“But they will give to people in temporary work, which is where people can come unstuck.”
One female tenant, who recently went to the group for help, was working at Debenhams when she borr-owed money from a pay- day lender to pay for Christ-mas.
She said: “I borrowed £400 to cover other costs I had, like my phone bill. When it came to paying them back, I had to pay £600.
“The company kept ring-ing me but I did not answer.
“Next, they started sending me letters, and that’s when I found out I owed them more than £1,000.
“I felt so depressed I didn’t know how I was going to pay that amount back.”
Mr Cringle said one alter-native to payday loan comp-anies was credit unions.
He said: “People have to be members and open a savings account before they can borrow, but they are essentially a socially- resp-onsible lender.
“Their rates may be high-er than banks, but they don’t chase people, or send bail-iffs round. They talk to people to work out the best way to pay money back.”
1stCall Hyndburn can be contacted by calling 01254 352595, emailing info@1stcall hyndburn.org.uk, or online at www.facebook.com/1st callhyndburn
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