Political leaders and community groups have launched a new city-wide campaign against the growth of payday money lenders in Milton Keynes.
The number of payday money lenders is on the rise with branches of The Money Shop and other companies springing up across Milton Keynes and around the country.
The campaigners have signed a charter which calls for an end to the payday loan rip-off, tougher regulation and enforcement of payday lenders, including restrictions on the rates and fees that payday money lenders can charge customers.
This news charter calls for an end to irresponsible lending and greater support for ethical alternatives, like Milton Keynes Credit Union," Andrew Pakes.
In September, online money lender Wonga reported that a surge in customers helped the firm earn £62.5 million in profits, after tax, last year – a 36 per cent increase on the previous 12 months.
The local coalition was brought together by Andrew Pakes, Labour’s Parliamentary Candidate in Milton Keynes South, and Citizen’s Advice. Andrew has been campaigning for restrictions on payday lenders over the past two years.
He visited the CAB over the summer to hear more about their work advising families struggling with payday loans. The national debt charity StepChange reports that 20% of their clients in Milton Keynes last year had debts from payday loans, up from 9% in 2011.
Andrew Pakes, Labour & Co-operative Parliamentary Candidate for Milton Keynes South said: “With prices rising faster than wages and families struggling to make ends meet, I am concerned about the growth of these controversial money lenders in the borough.
“Local agencies like Citizen’s Advice are doing a great job helping people but we need to stop rip-off lenders exploiting people in the first place. This news charter calls for an end to irresponsible lending and greater support for ethical alternatives, like Milton Keynes Credit Union.
“I hope that the government will listen to our concerns and put tough rules in place to help tackle this issue.”
The payday lenders charter was signed by Andrew, Steve Naylor from Citizen’s Advice, Cllr Hannah O’Neill and other campaigners. Andrew and Cllr Hannah O’Neill will be writing to other community groups over the coming weeks to urge them to sign up to the charter as well.
Steve Naylor, Chief Executive of Milton Keynes Citizen’s Advice, added: “We’ve long been calling for action to stop people being given payday loans without proper checks to assess if they can afford to repay.
“People have seen debts balloon after their loans are rolled over time and time again so it is important that this is tackled. I encourage people to sign up to this charter and to send a strong message that protecting payday loan customers from predatory behaviour is paramount.”
If you want to sign the charter, please email: email@example.com
The full text of the charter is below:
The Charter to Stop the Payday Loan Rip-off
We believe irresponsible payday lending and other high cost credit is damaging the health and wealth of our country. Payday lenders are exploiting millions of people across the UK, trapping them in spirals of debt, and the problem is getting worse.
Payday lenders are breaking promises they made in their own customer charter. Self-regulation has failed. We call for effective regulation of payday lenders and high cost credit, which is properly enforced, to:
- Stop them giving loans to people who can’t realistically afford to pay them back
- Stop them repeatedly rolling over loans and creating spiralling debt
- Stop hidden or excessive charges
- Stop them raiding borrowers’ bank accounts without their knowledge and leaving them in hardship
- Stop irresponsible advertising and instead provide clear and transparent information
- Require lenders to promote free and independent debt advice, and ensure they co-operate with other services to help people get out of debt.
We also want action to support the growth of credit unions and other forms of more responsible lending; we want banks to increase the availability of credit to people on low and middle incomes: and we want new research on capping the total cost of credit undertaken now.