MACDONALD WELCOMES PAYDAY LENDERS INVESTIGATION AS UK GOVERNMENT DRIVES JOBLESS TO SEEK PAYDAY LOANS
Saturday, 29 June 2013 17:13
Falkirk East SNP MSP Angus MacDonald has welcomed an investigation by the Competition Commission into payday loans as charities and pressure groups warn new UK government cuts will drive unemployed people into the arms of payday lenders.
Chancellor George Osborne announced in the UK government spending review that the unemployed would have to wait seven days before claiming benefits. At present, the unemployed are not eligible for Jobseeker's Allowance for three days, but charities and pressure groups have warned that extending that to seven days would cause unnecessary hardship. The Office of Fair Trading (OFT) has uncovered ‘deep rooted’ problems within the payday loan industry.
Angus MacDonald MSP said:
“I welcome the fact that the OFT have referred the matter to the Competition Commission. The interest rates charged by these companies are eye watering and some of their practices are clearly worrying. This has been a particular concern to me for some time, not least because of the impact it has on constituents who may be on a low income, or vulnerable.
“I look forward to the Competition Commission reporting very quickly on this matter. At the end of the day however, what is needed is a sensible rate cap on the amount of interest that can be charged and that should be done as a matter of urgency.
“The announcements of the Chancellor yesterday and in particular the seven day wait for claiming unemployment benefits will cause huge misery in many areas and may well force people who are already struggling into the hands of such lenders. Creating debt problems on top of job losses is irresponsible and punitive, but sadly typical of the UK Government.”