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Payday calls soar at National Debtline 30 May 2013

The National Debtline took more than 20,000 calls about pay day lending-related debts in 2012 – almost double the previous year.

The startling figure illustrates the widespread growth of the short-term advance market but also the number individuals experiencing payment difficulties as awareness of the products grow.

The figure represents a 94% year-on-year increase and a staggering 4,200% increase since the financial crisis began in 2007.

Calls to the charity that are related to payday lending now represents one call every seven minutes – a total of 8,334 calls from January to April.

Today’s news comes amid mounting concern about lending practices of those in the payday lending market.

Michael Ossei, spokesman for uSwitch.com, said it is time that consumers were given clear repayment plans.

He explained: “The majority of loans are for one month, but if consumers miss the repayment date they are immediately placed on an extortionate rate of interest.

“We are calling for a tiered repayment system, where interest increases in stages, giving breathing space to consumers struggling to get back on track with repayments.

“Payday loans may serve a purpose, providing a fast, short-term injection of cash to people who need it for a defined, limited period and have the means to pay it back. But, as they currently stand, it is clear is that they are doing more harm than good.”

 

 

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