SDLP MLA Colum Eastwood.
People faced with mounting debt are being urged by Derry MLA Colum Eastwood to seek professional advice rather than opt for quick-fix payday loans.
The SDLP representative was speaking after the publication of a report detailing alarming levels of personal debt throughout the North.
The findings of StepChange, a debt advice service, show that the average client owed around £18,400 on credit cards and unsecured payday loans to multiple companies.
This is £3,000 more than the figures calculated for England, Scotland and Wales.
Mr Eastwood said that payday loan debt to multiple lenders was a particular burden for many households in Derry with borrowers getting caught up “a vicious circle of robbing Peter to pay Paul.”
He added: “Payday lenders have significantly less criteria for lending than banks which makes it very easy for vulnerable people to find themselves in financial difficulty due to quick-fix cash solutions.
“It is clear from the situation in Derry that more checks and balances must be put in place in the payday lending market.”
Mr Eastwood said he had been told by a local debt advisor that 90% of people presenting to the Citizens Advice Bureau office at Strand Road in Derry with debt issues resulting from payday loans were unemployed, students or people working zero hour contracts.
He added: “Many of those who presented to the local office were people in debt to multiple companies and who found themselves caught up in the vicious circle of payday loan debt.
“In a high number of local cases borrowers were bombarded by offers of further payday loans as soon as they signed up for one and as a result many of them ended up in a ‘robbing Peter to pay Paul’ situation.
“Borrowers need money immediately. Companies can provide loans within 15 minutes. The easy accessibility to cash attracts those most desperate to take out unaffordable loans when they feel they have no alternative.”
Mr Eastwood called on those finding it hard to manage their finances to seek professional help and advice rather than sign up for short term credit from payday loan firms.
He concluded: “I would urge anyone struggling to cope with debt issues to seek professional advice. My own constituency office or the Citizen’s Advice Bureau are always on hand to aid those seeking help or advice.”
Tags: