Cheshire East blocks payday lenders

CHESHIRE East Council is blocking access to payday loan websites in libraries and public buildings.

It said the move would help to protect people from falling into a high-interest debt trap.

The authority’s Cabinet agreed to restrict access to residents on public PCs in the Borough after reports of irresponsible lending and harassment.

A report by the regulator, the Office of Fair Trading (OFT), has revealed “widespread irresponsible lending”, with the Citizens Advice Bureau (CAB) claiming the industry has spiralled “out of control”.

The OFT has threatened to revoke the licences of the top 50 pay day lenders in the UK if they do not change their practices, warning that they need to fully comply with law and guidance.

Deputy leader councillor said: “We have taken this action after complaints that payday loan companies are charging ridiculous rates of interest. We have received reports from the CAB that they are advising people under the age of 18 who have been given loans and some who may have been intoxicated when they took out a loan. This is causing serious domestic problems.

“I am hearing that one company is charging 5,863% interest on loans. This is astronomical. It is all well and good if the person can pay the loan back in two weeks but if they go a day over they are subject to this rate. I advise anybody who needs to borrow money to speak with their local CAB branch or the credit unions and we can signpost people to the right places. Do not fall into the trap of using a payday lender to make ends meet, as it can quite easily lead to a downward spiral and financial misery.”

Councils in Dundee and Renfrewshire have already taken similar action.