Debt problems with payday loans doubles in one year

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Staff Reporter
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AS the new payday lending customer charter is launched, Citizens Advice bureaux across the country are today releasing new figures demonstrating a worrying increase in the number of serious debt cases relating to payday loans.

The Citizens Advice service has seen a ten-fold increase in the proportion of clients receiving casework help with multiple debts which included a payday loan debt in the last four years. In the first quarter of 2009/10 only 1 per cent of CAB debt casework clients had at least one payday loan and in the same quarter last year this had risen to 4 per cent. In the same quarter this year, 10 per cent had at least one payday loan.

Advice given by Thurrock Citizens Advice Bureau, included: which debts to prioritise, a client’s right to stop payday lenders taking money straight out of their bank account and negotiating a manageable repayment plan with the lender on a client’s behalf.

Thurrock CAB is calling on people who have taken out pay day loans to take part in a national survey to monitor whether payday lenders are sticking to their self-regulating charter. The year-long survey will ask payday loan customers questions including:

Q: Did the lender ask you to provide documents about your personal finances and general situation to check that you could afford to pay back the loan?

Q: Did the lender tell you that a payday loan should not be used for long term borrowing or if you are in financial difficulty?

Q: Did the lender offer to freeze interest and charges for you if you make payments under a reasonable repayment plan?

The survey will run on the Citizens Advice Adviceguide website at: http://www.adviceguide.org.uk/dialogue_payday_loan_survey

Participants will also be able to fill in template letters to inform the payday loan company of their situation and experience of taking out a payday loan. Citizens Advice will report initial findings from the survey in spring 2013.

Thurrock Citizens Advice, Chief Officer Mike Rawlings said:

“We want our clients to help us hold payday lenders to account. For too many people payday loans are a fast but dangerous way to borrow money. Quick cash payouts can have damaging long-term consequences.

“We’ve seen problems relating to payday loans rise significantly over the last four years and we’re worried that this will only increase as more people feel the squeeze. Christmas can be a particularly expensive time, but January always comes and we urge people not to get stuck with a Christmas debt hangover and seek budgeting advice from Thurrock Citizens Advice Bureau now.”

Thurrock Citizens Advice Bureau is urging anyone who is experiencing difficulties with a payday loan or considering taking one out to visit the bureau and seek advice about alternatives.

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77 COMMENTS

  1. […] Debt problems with payday loans doubles in one yearYOURTHUROCKAS the new payday lending customer charter is launched, Citizens Advice bureaux across the country are today releasing new figures demonstrating a worrying increase in the number of serious debt cases relating to payday loans. The Citizens Advice …Cost of Christmas: millions to use payday loans in UKVoice of Russia – UK EditionPayday loans: 500000 Londoners to borrow for ChristmasBBC NewsPayday loans: FCA could cap interest ratesshropshirestar.comLexology (registration) -Peeblesshire News -Melodika.net (press release)all 8 news articles » […]

  2. […] Debt problems with payday loans doubles in one yearYOURTHUROCKAS the new payday lending customer charter is launched, Citizens Advice bureaux across the country are today releasing new figures demonstrating a worrying increase in the number of serious debt cases relating to payday loans. The Citizens Advice …Cost of Christmas: millions to use payday loans in UKVoice of Russia – UK EditionPayday loans: 500000 Londoners to borrow for ChristmasBBC NewsPayday loans: FCA could cap interest ratesshropshirestar.comLexology (registration) -Peeblesshire News -Melodika.net (press release)all 8 news articles » […]

  9. In Debt – going into Debt. Get Advice now!

    Example of top 5 Pay Day Loan Companies

    From Money Supermarket
    1. wonga.com
    The representative example illustrates the cost of borrowing: it shows what your monthly repayments will be and how much you will repay in total over the term of the loan. The Representative APR is the annual rate of interest you’ll be charged, including any fees or charges.

    Representative example:
    £100 £14.79 £114.79 15 days 4214%
    Additional Details: Use discount code MSM55 to save £5.50 on your first loan. Use our sliders to choose how much you want to borrow and for how long. Exact costs of a loan are shown upfront on our homepage, so there are no surprises. The service is available 24/7/365 and you’ll receive a decision almost instantly. If approved, the cash will be sent to your bank in 15 minutes. Wonga.com is a fresh alternative to traditional payday loans as we only charge for the time you borrow, so you can even save money by repaying early.

    2. Payday UK
    The representative example illustrates the cost of borrowing: it shows what your monthly repayments will be and how much you will repay in total over the term of the loan. The Representative APR is the annual rate of interest you’ll be charged, including any fees or charges.

    Representative example:
    £100 £25 £125 28 days 1737%
    Additional Details: £25 per £100 borrowed EXCLUSIVE RATE for MoneySupermarket visitors with PaydayUK! You could borrow from £100-£400 with a discounted initial finance charge. The application will take you less than 2 minutes to complete and upon approval but before you sign your loan agreement a discounted rate of £25 per £100 will be applied. Bridge the gap between paydays with a payday loan from PaydayUK – No hassle, no fuss! For a chance to receive this special discounted offer of £25 per £100 borrowed, all you need to do is click on the ‘continue’ button and you will be redirected to our quick online application form. Don’t miss out on this exclusive offer – Apply for a payday loan, transferred via Faster Payments at NO extra charge today! £25 per £100 borrowed, EXCLUSIVE to MoneySupermarket customers only.

    3. QuickQuid
    The representative example illustrates the cost of borrowing: it shows what your monthly repayments will be and how much you will repay in total over the term of the loan. The Representative APR is the annual rate of interest you’ll be charged, including any fees or charges.

    Representative example:
    £100 £25 £125 31 days 1734%
    Additional Details: Need money today? With QuickQuid’s 10-Minute Money, get cash sent within 10 minutes of approval at NO EXTRA COST! Once approved, new customers can get up to £1,000 within 10 minutes of approval, any day of the week! Quick application, quick approval and quick cash — that’s the QuickQuid way! Don’t forget to use promo code MSM60 to save 60% on your initial finance charge, exclusive only to MoneySupermarket visitors!

    4. Payday Express
    The representative example illustrates the cost of borrowing: it shows what your monthly repayments will be and how much you will repay in total over the term of the loan. The Representative APR is the annual rate of interest you’ll be charged, including any fees or charges.

    Representative example:
    £100 £25 £125 28 days 1737.2%
    Additional Details: Smooth the gap between now and payday with Payday Express. Borrow £80-£500 until payday. Apply online in minutes, with no lengthy application forms or faxing of documents. Get an instant online approval decision, and your money paid out the same day.

    5. KwikCash
    The representative example illustrates the cost of borrowing: it shows what your monthly repayments will be and how much you will repay in total over the term of the loan. The Representative APR is the annual rate of interest you’ll be charged, including any fees or charges.

    Representative example:
    £100 £25 £125 28 days 1737%
    Additional Details: Do you need up to £500 Now? At Kwik Cash we find short term cash loans for working people. With no hidden charges, a quick application and high approval rates, Kwik Cash can help you find the cash you need today!

    UK Payday Today
    The representative example illustrates the cost of borrowing: it shows what your monthly repayments will be and how much you will repay in total over the term of the loan. The Representative APR is the annual rate of interest you’ll be charged, including any fees or charges.

    Representative example:
    £100 £25 £125 31 days 1737%
    Additional Details: Receiving the money you need has never been easier than with UK PAYDAY TODAY. Fill out the online form, and in just a matter of minutes you can borrow up to £400. No faxing, no lengthy applications and no hassle. UK PAYDAY TODAY will give you an instant online approval, and provide you with a same day money transfer at no extra charge.

  10. Helplines

    Business Debt Line Freephone 0800 197 6026

    Tax Aid Helpline on 0345 120 3779 between 10am and 12 midday, Monday to Friday.

    National Debtline free on 0808 808 4000 Monday – Friday 9am-9pm
    Saturday 9.30am-1pm

    Step Change (formerly CCCS) 0800 138 1111

    Christians against Poverty Debt Centres should ring 0800 328 0006

    CAB – Telephone: 0844 826 9689 (24/7)
    Fax: 01375 389863
    Web site: http://www.thurrock-community.org.uk/cab/index.htm

    Payplan – freephone 0800 280 2816 Our phone lines are open 8am to 9pm Monday to Friday and 9am to 3pm on Saturdays.
    ——————————————————————————————————
    Credit Union
    A new start for 2013?

    Essex Savers

    Chafford Hundred
    Beacon Church & Community Centre
    Drake Road
    Chafford Hundred
    Essex
    RM16 6RN
    Opening hours:
    Wednesdays: 10 am – 12 noon

    Grays
    Civic Offices
    New Road
    Grays
    Essex
    RM17 6SL
    Opening hours:
    Wednesdays: 9 am – 1 pm

  11. I know it can be difficult for people, particularly at this time of year, but until the government makes this type of daylight robbery illegal, the only other option is to educate people to what they are doing. You really do need your brains tested to go anywhere near one of these companies. THere’s another one on the TV advertising loans up to £2,000 for a period of up to a year at an interest rate of 248% I believe. You’d end up paying £4,960 in interest over the year which is an absolute scandal.

  12. Unfortunately a lot of families can see no other way of paying for Christmas presents etc.
    I can well remember using Provident Loans many years ago just to beable to buy my family gifts.
    It then becomes a vicious circle trying to pay it back without incurring bigger penalties.

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