Call for realtime credit database

Payday loans-1748157The credit industry should be forced to build a realtime database of borrowers to prevent consumers flitting between payday lenders and ending up in even more debt.
That is the verdict of Labour MP Yvonne Fovargue, who chairs the All-Party Parliamentary Group on Debt and Personal Finance and has been campaigning on the issue for a number of years.
Speaking on Radio 5 Live, she said: “We need the creation of a database of realtime credit information to combat the spiralling debt faced by many consumers when multiple loans are provided to customers, by different companies and in a short space of time.”
It is not known how Fovargue proposes the scheme be funded, as the major credit reference agencies – Experian, Callcredit and Equifax – already operate consumer credit files which are updated regularly, yet not in realtime.
But, at the moment, there is nothing to prevent a consumer taking out a payday loan from one business and then taking out another from a different firm within hours.
The move follows plans unveiled yesterday (Wednesday) to clamp down on the £2bn payday loans market, with new advertising restrictions.
The 50 biggest payday lenders have been given 12 weeks to change their ways or risk being shut down after watchdogs found evidence of “widespread irresponsible lending”.
The lenders, who account for 90% of the market, could lose their licences if they fail to act.
An investigation by the Office of Fair Trading found “widespread breaches of the law and regulations, causing misery and hardship”.

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