SOUTH Down Alliance Party spokesperson Councillor Patrick Clarke has said the recent warning from the Office of Fair Trading (OFT) to over 50 of the biggest payday lenders to clean up their industry in 12 weeks or face being shut down is long overdue.
Councillor Clarke believes the warning from the (OFT) which has reported payday lending firms to the Competition Commission over allegations of widespread irresponsible lending should act as a very serious warning to those involved in irresponsible lending at extortionate rates of interest.
He said: “I remain heavily critical of certain payday loan companies through their bad practices of irresponsible lending quite often to vulnerable people in our society which pushes many people deeper into debt.”
“As an elected representative I am all too aware of present financial difficulties many constituents across South Down are facing due to the present economic climate that we are living in. There are many people who are now very badly in debt as a result of certain payday lenders simply because they are unable to access affordable credit from banks, building societies and other lending institutions.”
“People are now turning to online and High Street payday lending firms who are sometimes charging astronomical amounts of interest on very small loans of only a few hundred pounds, which simply escalates if the borrowers rolls over their loan each month and just pays the interest which can be as much as £30 per £100 borrowed.”
“Many of these online and high street payday lenders are every bit as bad as the unregulated money lenders and loan sharks that have operated and still exist in many towns and cities across the North.
“I welcome any moves by the Government such as the new Financial Conduct Authority (FCA) which will have stronger powers to deal with payday lenders when it takes over the role from the Financial Services Authority in April 2014,” added Councillor Patrick Clarke.