Debt charities and Citizens Advice Bureaux are dealing with more and more clients struggling to cope with payday loan debts
Berwickshire CAB has been dealing with debt cases involving £336,393 since January this year and the number of cases involving payday loans is rising.
StepChange Debt Charity also reports a dramatic rise in the number of people in the region seeking help with payday loans. In 2012, 11% of their clients had payday loans; this figure more than doubled to 25% in the first three months of 2013.
Berwickshire CAB manager Rhona Calder said: “For some time now we have been seeing a steady increase in the numbers of cases of people who are having problems with payday loans. These loans can seem very attractive, but the trouble is their interest rates are often extremely high, so you can end up having to re-pay huge amounts. And the terms of these loans often mean that lenders can take money from your bank account without telling you.”
And that’s exactly what they did to one Borders resident who contacted the CAB.
The person involved had agreed a payment of £25 every fortnight but the lender accessed her account – without her knowledge - and cleared it completely, leaving her with no money to buy food. By the time she contacted the CAB she hadn’t eaten for over 24 hours and CAB staff had to arrange for her to get a food parcel, then contacted the lender who agreed to put a seven day hold on the client’s file.
“Our advice to anyone who is considering taking out a loan is to think very carefully before choosing a payday loan.
The CAB service want to hear from local people who have taken out a payday loan in the last six months.”