Weekly Industry Recap: week ending 17 Feb 2013:
This week, debt charities demand government watchdogs to strip away the power of payday lenders at the same time that students are taken for a ride.
If you’re anything like me, you’re probably hoping that the government would just grow a pair and muzzle these providers of short term loans that are causing so much havoc with their high interest payday advance lending. Well, Citizens Advice has had it as well, and I for one am glad to see the debt charity bare its teeth in demanding the same thing.
Citizens Advice says it’s got a smoking gun when it comes to the accusations that payday lenders are treating customers like animals, what with bombarding them with texts and emails to repay their debt, using abusive and aggressive staff to interact with customers, and even taking cash from customers’ accounts after debts have been cleared. The debt advice charity has taken their evidence and has gone running to the Office of Fair Trading, which is already investigating the payday lending industry for alleged wrongdoing, which makes it seem like this could finally be the nail in the coffin of the short term lending industry that you and I have all been waiting for so badly.
Sadly, the debt charity has kept its mouth shut as to which lenders they have the dirt on, as only the OFT knows for sure. However, Citizens Advice did spill the beans that at least two of the offenders are household names.
Meanwhile, this news comes on the heels of another revelation that University of Northampton students are being targeted by lenders, prompting the university to issue warnings on how dangerous it can be to agree to take out an instant cash loan. The new awareness campaign is a unique one in that every pound note that finds its way onto campus has been labelled with a little note warning students off from payday lending, a joint venture between the Students’ Union and university staff in honour of National Student Money Week.
There was more than just a bit of graffiti on pound notes for the week, though. Events and activities were held featuring money advisers offering free tips to students. You don’t have to resort to high cost consumer credit like payday loans if you’re a student, these advisers said – instead you can take advantage of several free support programmes offered by the university to help alleviate financial distress.
Lynne Condell, Chairperson of the National Association of Student Money Advisers (NASMA), says: “There have been examples recently of payday loan companies targeting students with information about high interest money lending options. For some students both legal and sometimes illegal money lending can seem like an attractive route to additional funds.
“However, students taking this approach often realise too late that they are in serious financial trouble with no easy escape.”
The University of Northampton Students’ Union has taken the creative approach of labelling every pound coin to pass through their venues with warning labels, urging students to ‘rethink taking out a pay day loan’ and consider the alternatives available to them.