Rise in multiple payday loans
We have seen a dramatic rise in the number of people seeking our help who have multiple payday loans. Over 2,000 of our clients this year have had five or more payday loans, a three-fold increase from 716 for the whole of 2009
At the more extreme end of the scale, 173 of those who sought our help in 2012 had ten or more payday loans while only 42 had this number in 2009. The average amount owed on payday loans among our clients is rising too, up from £1,187 in 2009 to £1,458 in 2012.
There has been a general rise in the numbers seeking our help with payday loans, going up from 6,491 in 2009 to 17,414 in 2011. So far in 2012, 16,467 people have asked for help with payday loans.
We think that the increase in the number of people with multiple payday loans is very worrying as this can be expensive credit and taking out multiple payday loans is a sign of a debt problem.
While the payday loan trade associations announced improved codes of practice for payday lenders in July which included commitments to carrying out appropriate affordability assessments and credit vetting to check that customers can afford the loan, the issue of multiple lending was not addressed.
We think that the payday loan industry needs to take action to deal with the problem of multiple lending, to prevent consumers from falling into a dangerous debt spiral.