Don Valley MP Caroline Flint has called for action to curb irresponsible pay day lenders after seeing the latest evidence produced by the Citizens Advice Bureau.
Bureau Manager of the North East Doncaster CAB, in Thorne, Karen Bothamley (right in picture), discussed with Caroline the CAB’s evidence that 65 per cent of payday loans are issued without any financial checks.
Caroline (left in Picture) said: “I am truly shocked that any company could be so irresponsible as to lend money to someone without any concern about whether they can repay. A debt of just £100 can mushroom into thousands. This is legal loan sharking of the worst kind.”
New figures from the national Citizens Advice payday loan tracker found 65 per cent of people did not get asked about their financial situation – leading to seven out of ten not being able to prepay the loan.
Yet this is despite the customer pledges of the pay day loan industry in its own customer charter launched in November 2012. The North East Doncaster CAB is monitoring cases through its payday loan tracker to see if the industry is sticking to its charter.
The new figures of the first four months after the new charter, was based on feedback from 1,270 customers, using more than 87 different pay lenders between November and March this year.
The figures also found that customers who were not asked affordability questions and had repayment problems were further let down by the lender. Six out of seven lenders did not offer to freeze the interest rate and charges when the borrower agreed repayments. Seven out of ten did not explain how much it would cost to extend the loan. Over eight out of ten did not treat people sympathetically.
For more information please contact North East Doncaster CAB on 01405 740550 or Phil Cole 07950 635393.