'Payday loan' worries mounting in East Lancashire, warns CAB

First published in News Lancashire Telegraph: Photograph of the Author by

BOSSES from branches of the East Lancashire Citizen’s Advice Bureau have warned about the dangers of ‘payday loans’.

Lynda Clegg, manager of four bureaux across Burnley and Pendle, said hundreds of clients were find- ing it difficult to get out of debt.

She said: “We have seen an increasing amount of people taking out loans and the numbers are still mounting up.

There is a snowball effect with people taking out a loan to pay another one off.We had one person borrow £200 to pay for a utility bill and they ended up paying back £1,500 because of the ridiculous amount of interest.

They are really bad news. The adverts on television are just as bad as the gambling ones and the majority of people using them are on benefits.

“What’s sad is that a lot of parents are taking out the loans with 1,000 to 2,000 per cent interest to buy Christmas presents for their children.”

Payday loans are for relatively small sums of money for short periods of time but they attract extremely high rates of interest. Demand for them continues to grow as unemployment rises.

Most of the payday lenders have now signed up to a voluntary charter that must be in place by late November.

Failure to do so could mean sanctions and the Office of Fair Trading has been given powers to stop rogue money- lenders and debt collectors.

Blackburn CAB manager David Dickinson said the demand for financial help in Blackburn was also on the rise.

He said: “Clients are worried that they can’t pay back their loans because the majority of the online lenders would prefer to communicate by email so it takes longer to sort out an agreement.

“The interest rises and it causes anxiety and stress for the clients. The CAB are here to help.”

Comments (15)

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9:31am Thu 15 Nov 12

berniep says...

These are legal loan sharks & should be outlawed.
People who work hard are targeted because there is no safety net for them if an unexpected expense arises ie washer, cooker or boiler breakdown,where people on benefits can apply for a crisis loan that is interest free & small repayment amounts.
These are legal loan sharks & should be outlawed. People who work hard are targeted because there is no safety net for them if an unexpected expense arises ie washer, cooker or boiler breakdown,where people on benefits can apply for a crisis loan that is interest free & small repayment amounts. berniep
  • Score: 2

9:50am Thu 15 Nov 12

2 for 5p says...

berniep wrote:
These are legal loan sharks & should be outlawed.
People who work hard are targeted because there is no safety net for them if an unexpected expense arises ie washer, cooker or boiler breakdown,where people on benefits can apply for a crisis loan that is interest free & small repayment amounts.
Crickey your going to want to spoon feed them next .
It clearly says how much the repayments are read the small print idiots.
And last of all I'm working class if I need money call me old fashioned but I go to the bank .
[quote][p][bold]berniep[/bold] wrote: These are legal loan sharks & should be outlawed. People who work hard are targeted because there is no safety net for them if an unexpected expense arises ie washer, cooker or boiler breakdown,where people on benefits can apply for a crisis loan that is interest free & small repayment amounts.[/p][/quote]Crickey your going to want to spoon feed them next . It clearly says how much the repayments are read the small print idiots. And last of all I'm working class if I need money call me old fashioned but I go to the bank . 2 for 5p
  • Score: 2

10:18am Thu 15 Nov 12

Excluded again says...

Most people in Lancashire are covered by a Credit Union. These are community owned savings and lenders, who charge only 12.68% APR as opposed to interest rates of 1000 -2000% APR.

If you are short of money why pay a lot more to borrow it just to give big bonuses to rich people in the City of London?
Most people in Lancashire are covered by a Credit Union. These are community owned savings and lenders, who charge only 12.68% APR as opposed to interest rates of 1000 -2000% APR. If you are short of money why pay a lot more to borrow it just to give big bonuses to rich people in the City of London? Excluded again
  • Score: 2

10:20am Thu 15 Nov 12

berniep says...

2 for 5p wrote:
berniep wrote:
These are legal loan sharks & should be outlawed.
People who work hard are targeted because there is no safety net for them if an unexpected expense arises ie washer, cooker or boiler breakdown,where people on benefits can apply for a crisis loan that is interest free & small repayment amounts.
Crickey your going to want to spoon feed them next .
It clearly says how much the repayments are read the small print idiots.
And last of all I'm working class if I need money call me old fashioned but I go to the bank .
Well arn't we the lucky one's like you i am also "old fashioned" i go to my bank but then i am in employment where i am lucky enough to have a contract & there-for considered worthy of a bank loan.
[quote][p][bold]2 for 5p[/bold] wrote: [quote][p][bold]berniep[/bold] wrote: These are legal loan sharks & should be outlawed. People who work hard are targeted because there is no safety net for them if an unexpected expense arises ie washer, cooker or boiler breakdown,where people on benefits can apply for a crisis loan that is interest free & small repayment amounts.[/p][/quote]Crickey your going to want to spoon feed them next . It clearly says how much the repayments are read the small print idiots. And last of all I'm working class if I need money call me old fashioned but I go to the bank .[/p][/quote]Well arn't we the lucky one's like you i am also "old fashioned" i go to my bank but then i am in employment where i am lucky enough to have a contract & there-for considered worthy of a bank loan. berniep
  • Score: 0

10:42am Thu 15 Nov 12

mavrick says...

Credit union every time. L.E.T could spread the word in a lead article. perhaps an interview with the credit union officials and how it works etc. I would consider this a community support effort.
Credit union every time. L.E.T could spread the word in a lead article. perhaps an interview with the credit union officials and how it works etc. I would consider this a community support effort. mavrick
  • Score: 1

11:54am Thu 15 Nov 12

useyourhead says...

How can they be pay day loans when, as stated, most of the people using the service are unemployed? nothing more than predators the whole bunch.
How can they be pay day loans when, as stated, most of the people using the service are unemployed? nothing more than predators the whole bunch. useyourhead
  • Score: 0

12:01pm Thu 15 Nov 12

HairyBowls says...

What a legacy to leave the next generation...communi
ty spirit broken, a country built on greedy firms whose very purpose of existence is to capitalise on misery and deprivation, We all seem out to rip each other off and promote each others downfall...all in the name of capitalism. We are not advancing civilisation this way, we are going backwards...
What a legacy to leave the next generation...communi ty spirit broken, a country built on greedy firms whose very purpose of existence is to capitalise on misery and deprivation, We all seem out to rip each other off and promote each others downfall...all in the name of capitalism. We are not advancing civilisation this way, we are going backwards... HairyBowls
  • Score: 0

12:54pm Thu 15 Nov 12

lwg76 says...

This paper is being hypocritical again and profiting from the subject.

Being poor does not mean being thick.
It wasn't the Payday loans that collapsed the financial system,

When are the CAB and other anti profiting on loan organisations going to back up their moans by directly helping the potential victims by saying don't go there, "Come to Us", for the help you need with say an interest free loan or even a grant.

And as for the hypocrisy of this paper, these adverts are on this page just to the right of the article.

"Quick Payday Loans (New)
Get Up To £1000 | No Credit Checks* 60 Seconds Cash - No Paperwork
www.SonicPay.Co.uk
£80-£1000 Quick Cash Loan
Instant Decision, Get Cash in 1 Hr. Quick and Easy Application.
maketodaypayday.co.u
k"
This paper is being hypocritical again and profiting from the subject. Being poor does not mean being thick. It wasn't the Payday loans that collapsed the financial system, When are the CAB and other anti profiting on loan organisations going to back up their moans by directly helping the potential victims by saying don't go there, "Come to Us", for the help you need with say an interest free loan or even a grant. And as for the hypocrisy of this paper, these adverts are on this page just to the right of the article. "Quick Payday Loans (New) Get Up To £1000 | No Credit Checks* 60 Seconds Cash - No Paperwork www.SonicPay.Co.uk £80-£1000 Quick Cash Loan Instant Decision, Get Cash in 1 Hr. Quick and Easy Application. maketodaypayday.co.u k" lwg76
  • Score: 0

1:11pm Thu 15 Nov 12

lwg76 says...

More adds on this page, More Hypocrisy.

"6 Month Bad Credit Loans
Instant Decision £500 to £5000. 3mth to 5yr Loan - NO Guarantor
prioritymoneyclub.co
m/6monthloan

Loans For Unemployed
Cash Available For Most Credit £100-£25,000. Decision On Screen.
Loans.FindGreatRates
.com"
More adds on this page, More Hypocrisy. "6 Month Bad Credit Loans Instant Decision £500 to £5000. 3mth to 5yr Loan - NO Guarantor prioritymoneyclub.co m/6monthloan Loans For Unemployed Cash Available For Most Credit £100-£25,000. Decision On Screen. Loans.FindGreatRates .com" lwg76
  • Score: 0

2:24pm Thu 15 Nov 12

darwenTower says...

Will credit unions lend to people with a bad rating?

People approach these 'payday' loan places in desparation and end up extremely worse off.
Anyone applauding those who exploit the needy or otherwise vulnerable should be ashamed of themselves.
Will credit unions lend to people with a bad rating? People approach these 'payday' loan places in desparation and end up extremely worse off. Anyone applauding those who exploit the needy or otherwise vulnerable should be ashamed of themselves. darwenTower
  • Score: 0

5:11pm Thu 15 Nov 12

Excluded again says...

darwenTower wrote:
Will credit unions lend to people with a bad rating?

People approach these 'payday' loan places in desparation and end up extremely worse off.
Anyone applauding those who exploit the needy or otherwise vulnerable should be ashamed of themselves.
Yes. You just have to be a member.

But they won't lend you more than you think you can repay.
[quote][p][bold]darwenTower[/bold] wrote: Will credit unions lend to people with a bad rating? People approach these 'payday' loan places in desparation and end up extremely worse off. Anyone applauding those who exploit the needy or otherwise vulnerable should be ashamed of themselves.[/p][/quote]Yes. You just have to be a member. But they won't lend you more than you think you can repay. Excluded again
  • Score: 0

5:20pm Thu 15 Nov 12

louderfasterlonger says...

I am working and am fortunate that I can buy my children nice things for Christmas and hopefully (and in an ideal world) my children will come to believe working hard reaps its rewards.
Unfortunately we have the people who don't work still intent on competing with my Hard Earned spending power.
A cuddle at Christmas with the words "sorry it's not much but I'll make it up to you when I get a job" will create the correct ethos in a child for the future.
Then again, having worked continuously for 32 years I can afford to sit on my Ivory Tower.
Christmas is NOT a spending competition, for the sake of a £200 borrow for presents from a loanshark your children will ultimately suffer later in the year when you have to "up sticks" to stay one step ahead of the bailiffs bully tactics.
Before anyone comments, I know I'm a SMUG B*****D !
I am working and am fortunate that I can buy my children nice things for Christmas and hopefully (and in an ideal world) my children will come to believe working hard reaps its rewards. Unfortunately we have the people who don't work still intent on competing with my Hard Earned spending power. A cuddle at Christmas with the words "sorry it's not much but I'll make it up to you when I get a job" will create the correct ethos in a child for the future. Then again, having worked continuously for 32 years I can afford to sit on my Ivory Tower. Christmas is NOT a spending competition, for the sake of a £200 borrow for presents from a loanshark your children will ultimately suffer later in the year when you have to "up sticks" to stay one step ahead of the bailiffs bully tactics. Before anyone comments, I know I'm a SMUG B*****D ! louderfasterlonger
  • Score: 1

6:57pm Thu 15 Nov 12

BuckoTheMoose says...

""There is a snowball effect with people taking out a loan to pay another one off.We had one person borrow £200 to pay for a utility bill and they ended up paying back £1,500 because of the ridiculous amount of interest. ""

Then this person obviously did not pay back the money in the agreed time.

Payday loan companies offer a service at a price. Some people use the service wisely, others get themselves into trouble and then complain.

The best advice is not to spend what you don't have.

If you are on a low wage than you need to spend a lot less. Christmas presents, particularly expensive ones, are not a priority.

People need to start taking responsibility for their own actions.
""There is a snowball effect with people taking out a loan to pay another one off.We had one person borrow £200 to pay for a utility bill and they ended up paying back £1,500 because of the ridiculous amount of interest. "" Then this person obviously did not pay back the money in the agreed time. Payday loan companies offer a service at a price. Some people use the service wisely, others get themselves into trouble and then complain. The best advice is not to spend what you don't have. If you are on a low wage than you need to spend a lot less. Christmas presents, particularly expensive ones, are not a priority. People need to start taking responsibility for their own actions. BuckoTheMoose
  • Score: 0

8:53pm Thu 15 Nov 12

2 for 5p says...

Louderfasterlonger

You might be smug but you are truthful
Louderfasterlonger You might be smug but you are truthful 2 for 5p
  • Score: 0

9:59pm Thu 15 Nov 12

DEO VOLENTE says...

Why are the CAB so worried? are they going to be responsible for paying the money back?

Deus Vobiscum
Why are the CAB so worried? are they going to be responsible for paying the money back? Deus Vobiscum DEO VOLENTE
  • Score: 0

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