Rein in 'payday lenders', say 93% of GB population
8% - equivalent to 4 million people – say they are likely to take out a payday loan in the next six months
Changes need to be made in order to protect consumers from ‘payday loan’ lenders, according to new research by insolvency trade body R3. Top of the list, for 68% of the GB population, is a call for stricter regulation on advertising of payday loans, whilst 65% think there should be a cap on the total cost that can be charged for credit. Only 7% of GB adults do not think there is a problem with current ‘payday loan’ lending.
Louise Brittain, R3 Council member commented:
“With their sophisticated TV advertising it’s hard to avoid the lure of the ‘quick and easy’ payday loan, yet nearly 93% believe regulation is now needed. Topping public concern is advertising of payday loans, and the need to give a clearer indication about the total cost of the debt.
“Like the public, our members believe there should be greater regulation of the payday loan industry, particularly of advertising with prominent ‘health warnings’ included about the actual cost of the loan. There should also be greater clarity on the size of the ‘payday loan’ industry using a real time register.”
The prevalence of payday lenders comes at a time of increasing financial stress - withover half (54%) the GB population now worrying about their levels of debt (up from 39% last quarter) and a similar proportion (51%) say they struggle to payday. In fact one in ten now struggle to payday as a result of making payments on a ‘payday’ or other short-term loan.
Eight percent – that is almost 4 million (3,915, 866) GB adults – report being likely to take out a payday loan in the next six months, up from 3.5 million GB adults six months ago. Over a quarter currently have no savings (28%).
Louise Brittain concluded:
“I am extremely concerned that so many are considering taking out a payday loan as a way of addressing debt concerns. If this was taken just as a one-off and paid back immediately then it could work – but our research tells us this tends is not always the case and there could well be merit in exploring a cap on the number of ‘roll-over’ loans that can be taken.
“For many, a payday loan will simply pile up the debt, and 60% of those who took a payday loan regret doing so. Before going down that route, I would urge those with debt concern to draw breath and consider all their options and ideally seek advice from an expert.”
For further information please contact:
Will Black, R3 Communications Manager
t: 020 7566 4215 m: 07917 422 485 e: firstname.lastname@example.org
Antoinette Huka, Communications Officer
t: 020 7566 4217 m: 07825 679 462 e: email@example.com
Notes to editors:
R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners.
R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by one of nine recognised professional bodies.
R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals.
ComRes interviewed 2,044 GB adults online between 27th and 29th April 2012. Data were weighted to be representative demographically of all GB adults. Data are also included for a previous wave conducted between 21st and 23rd October 2011, where ComRes interviewed 2,005 GB adults online. Full data tables can be found on at www.comres.co.uk.