Press Release, 29th May, 2013
Sharp rise in payday loans
New data from StepChange Debt Charity shows a dramatic rise in the number of people in Inverclyde seeking help with payday loans.
Sixteen percent of the charity’s clients in the Inverclyde Council area had payday loans in 2012, and this figure had jumped to 31% in the first three months of 2013.
Between 2011 and 2012 the average amount owed increased by £728 to reach £1,957, although fell to £1,333 by March this year.
Greenock and Inverclyde MSP Duncan McNeil said:
“It’s disappointing too see this dramatic rise in the number of people seeking help with payday loans. This rise shows that working Inverclyde is being squeezed due to pay freezes, cuts in hours, increased travel costs and hikes in energy prices”. It's in this environment that payday loan companies have spread like a virus, taking advantage of hard-pressed families prepared to run the risk of incurring annual interest rates in excess of 4,000 per cent”
“I would encourage people who are having difficulty to contact the community-based Credit Unions in Inverclyde. They can help manage people’s finances with low interest rates that are more favourable than the banks. When things get really difficult it also important to note that people can access free, independent and confidential advice at Money Matters on 715965”
Sharon Bell, head of StepChange Debt Charity Scotland said:
“The dramatic rise in problem payday loan debt in Scotland is alarming as this type of debt is expensive and can quickly spiral out of control. Regulators are taking some action but there are still widespread problems across the payday loan sector. It is crucial that anyone struggling to repay what they owe at the end of the month doesn’t just roll their loan over and rack up very high charges, but takes control and seeks advice from a debt charity instead.”