MBC appear to have stolen RR’s campaign re: pay day loan rip offs
RR’s original posts
Evening Gazette story showing MBC plagiarism of RR’s concerns« Sir Stuart Bell – would you believe it?
Poverty trap – Update. »
5570% APR. Outrageous, immoral and a poverty trap in waiting.
September 30, 2011 by rocklifferover
http://bettermiddlesbrough.wordpress.co ... n-waiting/
http://bettermiddlesbrough.wordpress.co ... uart-bell/
Evening Gazette story showing MBC plagiarism of RR’s concerns
Warning at 4,000% short-term 'payday loans'
by Sandy McKenzie, Evening Gazette
Oct 10 2011
TEESSIDERS have been warned they could end up paying interest of up to 4,000% if they take out short-term “payday loans”.
It comes as Middlesbrough Council officials prepare to write to lenders asking for details of the checks made on certain borrowers’ credit worthiness before cash was handed over.
Middlesbrough Trading Standards has urged people to think twice before signing up as borrowers.
It follows advertising campaigns promoting the loans as handy solutions to short-term cash flow problems.
But trading standards officials in the borough say exorbitant interest rates can leave borrowers in an impossible financial position - with spiraling debts which leave them unable to meet repayments.
A number of clients using its Trading Standards Money Advice service have been found to have taken out up to five similar loans from different companies.
And officials say typical APRs (the annual percentage rate of interest) being quoted can be as high as 4,000%.
But the companies say APR distorts their charges as the loans are designed as a short-term solution - and that charges such as £30 for a £100 loan over 28 days are made clear.
Trading Standards officials say problems arise when the borrower is unable to repay the loan and it rolls over into the next month.
That incurs more charges or - in the case of recent Money Advice clients - a second loan is taken out with another company to repay the first.
As the charges must be paid, the second loan must be for more money and before long the debts can be unmanageable.
One Money Advice client was even offered another loan from the same company - despite not being able to pay the first.
Under recent legislation lenders are required to assess the credit worthiness of all applicants before granting any loan - although Trading Standards officers in Middlesbrough believe all companies may not be carrying out the necessary checks.
Middlesbrough Council’s principal officer for fair trading Jim McCluskey said:
“We will be writing to the companies who have lent money to our clients to ask for evidence of this credit worthiness assessment.
“If the responses are not satisfactory we will investigate further.
“I do not believe it is fair to lend money when the client is clearly already struggling with other debts.”
Julia Rostron, the council’s executive councillor for community protection, said:
“In the current climate with job losses and wage cuts many people may be tempted by these loans thinking that they will be able to pay them back quickly.
“If this does not happen the cost of a small emergency loan can become astronomical.”
Anyone who needs assistance with multiple debts can contact Money Advice on 01642 728448.
The service is free and confidential.
http://www.gazettelive.co.uk/news/teess ... -29569095/
