|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |    25th of February 2018
|   Banking  |   Insurance  |   Property  |   Mortgages  |   Economy  |   Investments  |   Credit Cards  |   Debt  |   Loans  |   Pensions  |   Companies  |  

Loan News feed Loan News

All Financial News feed All Financial News




Jobless need protection from payday loans, charity says

Bookmark and Share

by Jan Harris
Jobless need protection from payday loans, charity says

Prior to the Payday loan industry’s launch of a new code of conduct this week, the Consumer Credit Counselling Service (CCCS) is calling for more protection for the unemployed.

The charity warns that the number of jobless people struggling to repay short-term, high-interest payday loans is increasing.

It wants the payday loan industry to ensure that affordability checks are carried out before a loan is issued, to ensure that the customer will be able to meet the repayments.

The popularity of payday loans have soared in recent years, but many consumer groups have warned that high interest rates on this type of loan can soon lead borrowers into a spiral of debt.

The CCCS said that it dealt with 1,243 clients last year who were unemployed and who were struggling to repay the payday loans they took out before becoming unemployed.

In 2009 it helped just 283 clients in this situation.

However there has been no overall increase in the total number of unemployed people contacting the CCCS for help and advice.

Delroy Corinaldi, director of external affairs at the CCCS, said: “Unemployment is the biggest single driver of debt problems in the UK, and people who have lost their job after taking out extremely expensive payday loans are finding it particularly difficult to cope.

“Payday lenders must recognise this growing problem.

“Crucially, payday lenders must also commit to work with debt charities like CCCS to set up affordable repayment plans when any borrower finds they are in difficulties.”

The payday loan industry is launching its new code of conduct following a consultation with the government.

It is expected to include measures to prevent debts building up to unmanageable proportions, including a a limit on the number of consecutive loans that a borrower is allowed to take out.

Firms are also expected to promise to improve the way they share data with credit reference agencies.

Some mainstream members may refuse to offer financial products, including mortgages, to applicants who have previously taken out a payday loan, even if they have repaid it on time.

Earlier this month, GE Money announced that it would no longer consider applicants who had taken out a payday loan in the past three months, or more than twice in the past year.

Discuss this in the Finance Markets forums

Story link: Jobless need protection from payday loans, charity says



News posted: July 24, 2012

Financial Services:





Related financial stories to: Jobless need protection from payday loans, charity says:
Previous: «
Next: »

Visited 3121 times, 1 so far today

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Tags: ,