Problems with payday loans are “endemic”

5 November, 2013

Following his appearance before the Business, Innovation and Skills Select Committee, StepChange Debt Charity’s head of policy Peter Tutton said:

“Problems within the payday loan industry are endemic. Despite the introduction of a new code of practice and repeated assurances from the sector that it understands the need to improve standards, very little appears to have changed.

“We continue to see sharp increases in the number of people seeking help with payday loan debts, and there is no evidence that this is set to change in the immediate future. Poor lending practices, unaffordable rollovers and multiple borrowing are pushing many vulnerable people into an unsustainable cycle of borrowing.

“There is an obvious an urgent need for reform. The problems with the payday sector are well established, yet despite this, we are still in a position where widespread harm to consumers is taking place. Unless there is a clear evidence of improvements in the payday loan sector within the next year, both the industry and regulators will have failed vulnerable consumers.”