MAT > Media centre > News > Minister hosts payday loans summit

Minister hosts payday loans summit

Monday 1st July 2013
The Money Advice Trust this morning attended a summit at the Department of Business, Innovation, and Skills to discuss the payday loans industry.
 
Commenting on the summit, Joanna Elson, Chief Executive of the Money Advice Trust, said:
 
“The discussion highlighted some key areas of concern around the payday loans industry. We hope that this will provide a catalyst for more effective regulation which protects consumers from much of the detriment caused by these loans.     
 
“We believe one of the most pressing regulatory concerns should be to ensure sufficient affordability checks are conducted prior to a loan being approved. The decision to lend money should be taken just as carefully as the decision to borrow. This is as true with short term loans as with a loan to buy a home or car.
 
“Yet the evidence we see at National Debtline shows that far too often payday lenders do not sufficiently check whether the customer has the means to repay before advancing the loan.
 
“We welcome the Consumer Finance Association’s new code of practice and similar commitments from other payday and short-term lenders which pledge robust affordability checks. The proof of the pudding will be in the impact such pledges have on lending decisions.  We urge regulators – the OFT and the FCA in due course – to pay close attention to whether those affordability checks are taking place. 
 
“Since we help 100 people a day who are having problems paying back their payday loan we’re very happy to share our evidence base with both regulators and the industry.
 
“Anyone struggling with payday loan debts should take a look at this National Debtline factsheet and contact our helpline for further guidance.”
 
National Debtline payday loans stats:
In quarter 1 this year we took 6,992 calls on payday loans, an increase of 33 per cent on 2012. 
 
Last year we received over 20,000 calls for help with payday loans, a huge record. The figure represents a 94 per cent year on year increase, and an increase of 4,200 per cent since the onset of the financial crisis in 2007.
 
2007: 465
2008: 776
2009: 1,244
2010: 3,330
2011: 10,301
2012: 20,013
 
You can read a National Debtline consumer advice factsheet on how to deal with payday loan debts by clicking here.
 
 
© Money Advice Trust Charity Number 1099506
site by rubbaglove