CALLS by a Government committee to bring in new control measures for the payday loans industry have been welcomed by a Blagdon-based debt advice service.
The House of Commons’ Business Committee says the UK needs to introduce much tighter regulation of debt service products, which it says target vulnerable people.
And Chief Executive of DAWN Advice Liz Chadwick believes the trend in lenders offering short-term, high-interest loans is causing major money problems for people across the country.
“I am pleased to see ongoing discussion at the highest levels about these loan offerings and that the Government is seriously considering banning these products, which are already being investigated by the Office of Fair Trading,” she said.
“Not all borrowing is bad — it is fine when people have access to affordable lending and when they are borrowing within their means.”
However, the idea of short-term lending is frequently anything but short-term as all too often it is an easy entry to a spiralling debt problem that quickly grows beyond the borrower’s control.
“I would like to see the Government go further and ensure that affordable, responsible lending is made more readily available, through organisations such as Credit Unions, to people who need it and who can afford to pay it back.”
As well as running the former Castle Morpeth Citizens Advice Bureau, DAWN Advice operates the Northern Debt Line across the North East and Cumbria.
Those who are concerned about payday loans or their financial situation will receive free, confidential and independent advice on 0300 333 3445.