Citizens Advice Scotland have said that payday lenders are destroying the lives of thousands of people in Scotland.
Leading Payday Loans companies gave evidence to the House of Commons this morning, and defended their business by saying only ‘2 or 3 per cent’ of their customers got into financial difficulty.
In response, CAS Chief Executive Margaret Lynch says,
“Payday Loan cases are one of the biggest issues dealt with now by the CAB service. Across Scotland, our advisers are seeing over 100 new cases every week of people who are in severe financial crisis because of a payday loan. That’s a huge number, and is about a third higher than we saw this time last year.
“Many payday lenders operate in ways that ensure people will get into debt they can’t handle. Lenders routinely target low-income groups, mislead about their charges, impose massive interest rates and then employ drastic efforts to recover the debt. The industry had promised to clean up its act, but our evidence is that lenders are still operating in ways that are bound to hurt vulnerable people.
“Some of the comments made today at the committee show that lenders have a lot to learn about the impact of the way they operate, and have no interest at all in changing their business to protect vulnerable consumers.
“Our message to the public today is that if you have got into debt, avoid ‘roll-over’ loans. Come and see the CAB, for free, confidential advice on how to cope. And to people who might be considering taking out a loan to pay for Christmas we say: Be very careful about what you get into. Payday Loans might seem convenient today, but they can lead to years of misery and debt that will destroy your lives. Again, get advice before you borrow. There are other sources of credit, which offer a better deal, are easier to repay and will save you from crisis.”
For more information, interviews etc. please contact Tony Hutson on 0131 550 1010 or 07774 751655. Please note that this number is for journalists only, for advice please call 0808 800 9060.