Friday, 12 July 2013

Supporting the call for action on pay-day lending

It is the second reading of Paul Blomfield's Private Members Bill curtailing the excessive activities of payday lending companies today.

Yesterday I joined Paul and all the those calling for action on pay-day lending in Parliament to lend my support to his Bill.


Payday lenders are causing serious debt problems for so many people. Their massive interest rates, rip-off charges, irresponsible lending and misleading advertising of payday lenders are pushing those who can least afford it into spiralling debt. Wednesday's decision by the OFT to refer the payday loans market to the Competition Commission for ‘widespread irresponsible lending’ just shows why we need regulation.

You can read a more detailed article about the impacts here - Boom-time for legal loan sharks: How deregulation, market failure and a crisis in wages has led to the rise of payday lenders - by credit market expert Carl Packman, which calls for urgent action to protect the most financially vulnerable.

Ahead of the Second Reading of Paul Blomfield MP’s Private Members Bill in the House of Commons tomorrow, this paper is an important reminder of the urgent policy changes that are required.

You can find out more about the paper below and the High Cost Credit Bill here.
This morning the Guardian carries an article on payday loans; ​‘Rise in payday loan debts alarms charity’ (Guard p25) -

It revealed that; more than 30k people with payday loans have sought debt advice from the charity StepChange in the first six months of 2013 – almost as many as in the whole of 2012.

The charity said that between January and July it advised 30,762 people struggling with high-cost short-term loans, against a total of 36,413 in the previous 12 months.

The figures come as Paul Blomfield MP prepares for a second reading of his private member's bill calling for more regulation of the sector.

StepChange said the amounts owed by its clients increased only fractionally in the first six months of 2013, rising by £8 to £1,665, but it was alarmed by the continued growth in the number of people with more than five payday loans.

Blomfield: “These shocking figures from StepChange show the huge growth in the number of people who are getting into debt as result of payday loans," he said. "Payday lenders are targeting people who are short of cash and claiming to offer help, but their massive interest rates, rip-off charges and misleading advertising often just push vulnerable people further into a spiral of debt." (Guard)

Class - Boom-time for legal loan sharks: How deregulation, market failure and a crisis in wages has led to the rise of payday lenders - by credit market expert Carl Packman, which calls for urgent action to protect the most financially vulnerable.

Ahead of the Second Reading of Paul Blomfield MP’s Private Members Bill in the House of Commons tomorrow, this paper is an important reminder of the urgent policy changes that are required.

You can find out more about the paper below and the High Cost Credit Bill here.