Payday loans misery warning

Doncaster Citizens Advice Bureau director Matthew Bennie. Picture: Liz Mockler D7358LM
Doncaster Citizens Advice Bureau director Matthew Bennie. Picture: Liz Mockler D7358LM

Doncaster’s most vulnerable residents are making themselves ill over the stress of crippling loan repayments they can’t afford.

That’s the message from campaigners calling for tougher action on payday lenders, which have sprung up in massive numbers on high streets.

The Citizens Advice Bureau has reported a 100 per cent increase in the number of clients contacting them about financial difficulties - and warns the problem could get worse as people borrow to pay for Christmas.

Doncaster Mayor Ros Jones is supporting national proposals for tighter guidelines for payday lending businesses, while Doncaster North MP Ed Miliband wants to see action including capping interest rates, halting the spread of high street lenders and forcing them to fund Credit Unions.

Payday lenders are legal, which means they are difficult to regulate at present.

Matthew Bennie, director of Doncaster Citizens Advice Bureau, said the number of people coming to them had doubled from about 100 to 200 in 12 months and he expected the trend to continue.

He said: “If you want evidence that the market has expanded, you have only got to walk down the high street. There are at least 13 money shop-type outlets in the immediate town centre area and that was some time ago.

“We don’t see the problem stopping. We deal with a lot of vulnerable people who have been asked to sign documents that they don’t really understand.”

Mr Bennie added: “Paying for Christmas with payday loans is going to cause problems further down the line. People come to us in January because they have got into debt trying to afford Christmas.”

Instead of turning to payday lenders, people are encouraged to join the South Yorkshire Credit Union.

Chief executive Ian Guest said: “A Credit Union is only provided for by the people that use it and any profit made is returned to members. Members save with us, then other members borrow those savings and pay it back with interest.”