Payday loans ‘piling on agony’

wonga-300x203Payday loan firms have once again ended up in the dock after it was revealed that twice as many people who sought help with debts in 2012 had payday loans compared with the previous year.
The StepChange debt charity helped 36,413 people last year who had payday loan debts, some 20,000 more than the previous year, with the average debt of those in trouble being £1,657.
The charity, formerly the Consumer Credit Counselling Service, said that the low-paid and young were most likely to be caught up by payday loan debts.
The average payday loan debt of people it helped was now higher than the average monthly income of these clients.
The increase shows the rapid rise of payday lending, although credit cards and unpaid bills are also concerns for those seeking help.
Delroy Cornaldi of StepChange said: “These findings are yet more evidence of the scourge of payday loans. With household finances increasingly under extreme pressure and access credit far less available, many face the unenviable choice of using payday loans simply to make ends meet.”
In March, the Office of Fair Trading published a review of the payday loan market, and exposed what it branded “widespread irresponsible lending” in the sector.
It recommended a clampdown on advertising and gave the biggest 50 firms 12 weeks to change their practices, or risk losing their licences.

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