05/11/2013

Lewis Slams Payday Lenders

MoneySavingExpert.com creator Martin Lewis has told MPs payday lenders are "in danger of grooming a new generation to this type of borrowing".

Mr Lewis joined other consumer groups, regulators and payday loan firms at a Business, Innovation and Skills Select Committee hearing into the industry this morning. He asked whether payday lenders were really needed.

He said: "I think we'd all be a lot better off without them, and maybe it's worth the sacrifice for the few small number of people who actually do find them rather convenient.

"If you take 100 people who get payday loans, I would suspect 99 of them would find a cheaper and better alternative doing something else, or by not doing them.

"They're used by far too many people, and they're not fit for the purpose that they are used for."

Mr Lewis's appearance came as MoneySavingExpert.com called for payday loan ads to be banned from being shown during kids' TV programmes. A poll by the firm found one in three parents with kids under 10 say their children have repeated payday loan ads' slogans – an issue Martin also raised at the committee.

He said many payday loan borrowers don't know how to repay the loans within a month, while others should freeze a credit card in a bowl of water instead – as having to crack the ice will make them think about whether they can afford to borrow.

(CD/IT)

Related UK National News Stories
Click here for the latest headlines.

25 October 2011
Payday Loans Fuel UK Debt Problems Says Charity
Payday loans providing people with last minute cash before their pay check arrives is fuelling consumer debt problems, according to research by a debt charity. The survey by the Debt Advice Foundation (DAF) found 41% of those struggling with debt are saying their financial problems are the result of high-interest ‘payday’ lending schemes.
02 September 2014
Increase In People Struggling With Payday Loans
The number of people struggling with payday loans is increasing, according to debt charity StepChange. In the first six months of 2014 the charity helped almost 13,000 more people with payday loan debts than in the same period last year.
15 February 2013
Citizens Advice Call For Immediate Suspension Of Payday Loan Co. Licenses
The Office of Fair Trading (OFT) are being urged to use new powers to immediately suspend the licences of four payday lenders, who Citizens Advice claim are "causing significant distress" to customers.
28 March 2012
Football Fans Call On Clubs To Stop Running Payday Loan Adverts
Fans of 18 football clubs have come together to petition their respective clubs to stop carrying advertising by payday loan company Wonga on their websites. The group, lead by Northampton Town supporter Bob Ward and grandson Dan, are also encourage fans of more than 60 other clubs to do the same.
07 December 2011
Payday Loans Make Situation Worse, Says Report
Half of those taking high interest, short-term payday loans have reported it made their situation worse, according to a study published on Wednesday. The research from insolvency trade body R3 found that of those who had taken out a payday loan, 60% regret the decision and 48% believe the loan has made their financial situation worse.