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)

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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.