Labour group leader calls for government to put a stop to high interest loans
Published: 27 Aug 2013 07:000 comments
THE leader of the Labour group has branded payday loan lenders the "lowest of the low".
Councillor Bobby McGill called for "political action" to be taken at a UK level against the high-cost short-term lenders.
The opposition leader made the outburst as councillors discussed the impact of Welfare Reform at Thursday's full Clackmannanshire Council meeting.
He said, "I hate these payday loans. I think it's time that political action is taken. They are the
lowest of the low as far as I'm concerned.
"They are putting pressure on top of pressure. There is not a great deal we can do other than recommend credit unions. It needs policy from government to say 'look, this has to stop'."
StepChange Debt Charity recently revealed that cash-strapped residents in the Wee County are borrowing four-times more in payday loans than they did last year.
The lenders can charge eye-watering annual interest rates of 4000 per cent.
According to the charity, almost one in five of its Clackmannanshire clients had payday loans last year and between 2011 and 2012 the average amount owed per borrower was £760.
Mr McGill added, "It's only the poorest of society that go to them and it just makes things worse."
In June the Office of Fair Trading referred the market for payday lending in the UK to the Competition Commission because of concerns
about "deep-rooted problems" with the way competition works.
It had previously written to 50 leading lenders calling for them to demonstrate that they fully complied with their legal obligations and the standards expected. Of the 50 firms contacted almost half (19) have since told the consumer watchdog they no longer plan to operate as payday lenders.