CAB launches national payday loan survey

Published on

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% of CAB debt casework clients had at least one payday loan and in the same quarter last year this had risen to four per cent. In the same quarter this year, 10 per cent had at least one payday loan.

Advice given by bureaux includes 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.

Citizens Advice 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: 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.

Gillian Guy, chief executive of Citizens Advice, said: “Quick cash payouts can have damaging long-term consequences. Citizens Advice Bureaux up and down the country are seeing people who are already in long-term financial difficulty and are using payday loans as a desperate way to try to stay afloat. With the added costs of Christmas around the corner we’re worried that even more people may see payday loans as away to get by, leading them into a spiral of debt.

“Citizens Advice is calling on people to name and shame payday loan companies who aren’t acting fairly.”

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Skipton Group appoints group chief internal auditor

Skipton Group has appointed Caroline Dale as its new group chief internal auditor, with...

DC Law passes 10,000 Trustpilot reviews with ‘Excellent’ customer rating

DC Law has exceeded 10,000 customer reviews on Trustpilot while maintaining an ‘Excellent’ rating...

Family Building Society launches BoE tracker mortgages

Family Building Society has launched a new range of Bank of England tracker mortgages...

The Mortgage Works cuts buy-to-let rates

The Mortgage Works has reduced buy-to-let mortgage rates by up to 0.25 percentage points...

Nationwide cuts mortgage rates for third time this month

Nationwide Building Society has reduced mortgage rates by up to 0.25 percentage points across...

Latest publication

Other news

Skipton Group appoints group chief internal auditor

Skipton Group has appointed Caroline Dale as its new group chief internal auditor, with...

Q&A: Ben Allkins, Just Mortgages

Mortgage Soup fires the questions at Ben Allkins, head of mortgages and protection at...

Newcastle for Intermediaries unveils new tracker and fee-assisted products

Newcastle for Intermediaries has expanded its mortgage range with new products, including fee-assisted 70%...