Families in York turning to payday loan firms

Families in York turning to payday loan firms

Families in York turning to payday loan firms

First published in News
Last updated

WORKING families in York are turning to payday loan companies in increasing numbers just to put food on the table.

More and more people in the city who are seeking advice for debt management have payday loans, and research shows many of those are working people on low incomes struggling to afford the essentials.

The figures have come from partnership Advice York, who have published reports on the perils of payday loans, and on the fight to help people hurt by benefit reports.

The organisation - which includes York Citizens Advice Bureau, Age UK and York Foodbank - said that between the first quarters of 2011/12 and 2012/13 the number of people going to York CAB who had at least one payday loan soared from one to 24.

Advice York then surveyed its advice clients to find out how and why they used payday loans, and discovered that of the 50 people who replied, a third used payday loans, and of those, two thirds were in work. On top of that, as much 65 percent of payday loans went to pay for essentials like food, rent, and utility bills.

And even though they often do not offer the best deal, the most popular companies were those which either advertise widely on TV or have a visible presence on the high street.

Report author Sophie Tragheim said many people found themselves trapped in a cycle of debt after they turned to payday lenders thinking they had no other options.

One woman told Advice York that working in a zero hours contract in a low-paid cleaning job meant she soon got into debt simply trying to pay for essentials.

Even when working 55 hours a week, a large amount of her income went to pay back debts so she turned to payday loans to cover living costs - getting a £1000 loan despite her existing debts. Soon she defaulted on repayments and was hit by a hefty penalty, and ended up relying on food banks and the generosity of friends to survive.

Now the organisation wants to highlight that payday lenders and interest rates of 5000 percent are not the only options to getting credit, and raise awareness of the alternatives to counteract the glamour of TV advertising, such as Credit Unions or high street banks which Advice York's manager Susan Wood said may still offer better deals even to those with pre-existing debts.

She said: "We want people to shop around so if they have to go to a payday lenders they don't go to the most expensive one."

Gary Simpson, head of development at South Yorkshire Credit Union which covers York, said it was time to offer genuine competition to pay day lenders.

Comments (8)

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10:56am Fri 11 Jul 14

The Great Buda says...

The race to the bottom continues.
The race to the bottom continues. The Great Buda
  • Score: 9

11:32am Fri 11 Jul 14

Yorkmackem1 says...

This is what happens when your pay is frozen for successive years whilst the cost of domestic bills, food, petrol etc continues to massively outstrip inflation. How can anyone condone this is beyond me.
This is what happens when your pay is frozen for successive years whilst the cost of domestic bills, food, petrol etc continues to massively outstrip inflation. How can anyone condone this is beyond me. Yorkmackem1
  • Score: 8

11:50am Fri 11 Jul 14

anistasia says...

All people want is a living wage.a living wage is enough to live on to pay bills put food on the table and enough wages so you dont have to have top up on wages from benefits system.but 0 hrs contracts no real job security frozen pay rises its only gonna get worse.and who's to blame the government. they won't clamp down on extortionate Apr rates from pay day lenders so they have less money to pay bills and put food on the family table.solution pay better wages and ban pay day loans make the banks lend money.
All people want is a living wage.a living wage is enough to live on to pay bills put food on the table and enough wages so you dont have to have top up on wages from benefits system.but 0 hrs contracts no real job security frozen pay rises its only gonna get worse.and who's to blame the government. they won't clamp down on extortionate Apr rates from pay day lenders so they have less money to pay bills and put food on the family table.solution pay better wages and ban pay day loans make the banks lend money. anistasia
  • Score: 10

1:46pm Fri 11 Jul 14

York2000 says...

The right wing Press comments team will spoil this article with their bile pretty soon.
The right wing Press comments team will spoil this article with their bile pretty soon. York2000
  • Score: 3

2:41pm Fri 11 Jul 14

Kevin Turvey says...

Interesting that the Press still have a 'Stamp out poverty' campaign and have today run a story about the misery that payday loans companies put onto the people that ultimately ‘choose’ to use them.

How can the press undertake this campaign when on their website there adverts for just such companies?

Can anyone please explain how this can be.




'York2000 says...

The right wing Press comments team will spoil this article with their bile pretty soon.'

Did this fit your expectations?
By the way I am far from rightwing or leftwing!
Interesting that the Press still have a 'Stamp out poverty' campaign and have today run a story about the misery that payday loans companies put onto the people that ultimately ‘choose’ to use them. How can the press undertake this campaign when on their website there adverts for just such companies? Can anyone please explain how this can be. 'York2000 says... The right wing Press comments team will spoil this article with their bile pretty soon.' Did this fit your expectations? By the way I am far from rightwing or leftwing! Kevin Turvey
  • Score: -7

3:10pm Fri 11 Jul 14

nottoooldtocare says...

Here goes..... lets blame the government, past, present and future. it's all their fault, we don't get enough, cost of living etc, etc,. Always someone else to blame for the plight of others.
Now here's a novel idea, buy fresh potatoes, not tins, make your own pizza's not buy them. Cut down on the take out meals. Go for a bog standard mobile, not the latest ipad/pod type thingy. There are many ways to save money on day to day bills, but buying ready made meals and tinned food isn't one of them, regardless of whose brand it is. Go to a local butcher they will advise on cheaper cuts of meat and how to cook them, they are generally cheaper and better quality than the supermarkets. h and when you go shopping make a list, done by on instinct, you would be surprised what you can save. Write down everything you spend too, surprising where it goes when you look back. I know this because I've had to do this for myself, it does work.
Here goes..... lets blame the government, past, present and future. it's all their fault, we don't get enough, cost of living etc, etc,. Always someone else to blame for the plight of others. Now here's a novel idea, buy fresh potatoes, not tins, make your own pizza's not buy them. Cut down on the take out meals. Go for a bog standard mobile, not the latest ipad/pod type thingy. There are many ways to save money on day to day bills, but buying ready made meals and tinned food isn't one of them, regardless of whose brand it is. Go to a local butcher they will advise on cheaper cuts of meat and how to cook them, they are generally cheaper and better quality than the supermarkets. h and when you go shopping make a list, done by on instinct, you would be surprised what you can save. Write down everything you spend too, surprising where it goes when you look back. I know this because I've had to do this for myself, it does work. nottoooldtocare
  • Score: -5

9:12pm Fri 11 Jul 14

deckhanddave says...

I just found out another way York Council kick those when they are down. If you fail to keep up monthly payments on Council Tax, the Council send you a single letter to get a response from you and to warn they will take action. I believe they send this letter second class. The next correspondence you will receive is a summons generated automatically adding £65.00 to your bill informing you that the full amount is now due. They will also ask the court to add another £40.00 to the bill. It doesn't matter if you never received the letter and the post office will tell you they don't guarantee to deliver it and only 'aim to deliver in 2 to 3 days'. Ring the council you get told the full amount has to be paid and it is going to court no matter what you do. The charges stand too. Their stance is you should have dealt with it sooner. It doesn't matter whether you are suffering a life threatening condition or fighting for your life. Whether you are having ongoing problems and treatment. You must remember 'PAY YOUR COUNCIL TAX BILL'. The system is wrong. In this day and age couldn't they telephone? send an Email? Maybe they could work for their wages and look at an account and think maybe the person is ill, said person paid the last two or three years off early and started paying this bill earlier than necessary. My friend now has to find an extra £100 to give these *****. It may be too late to save her that money but I intend to fight to get this system changed.
I just found out another way York Council kick those when they are down. If you fail to keep up monthly payments on Council Tax, the Council send you a single letter to get a response from you and to warn they will take action. I believe they send this letter second class. The next correspondence you will receive is a summons generated automatically adding £65.00 to your bill informing you that the full amount is now due. They will also ask the court to add another £40.00 to the bill. It doesn't matter if you never received the letter and the post office will tell you they don't guarantee to deliver it and only 'aim to deliver in 2 to 3 days'. Ring the council you get told the full amount has to be paid and it is going to court no matter what you do. The charges stand too. Their stance is you should have dealt with it sooner. It doesn't matter whether you are suffering a life threatening condition or fighting for your life. Whether you are having ongoing problems and treatment. You must remember 'PAY YOUR COUNCIL TAX BILL'. The system is wrong. In this day and age couldn't they telephone? send an Email? Maybe they could work for their wages and look at an account and think maybe the person is ill, said person paid the last two or three years off early and started paying this bill earlier than necessary. My friend now has to find an extra £100 to give these *****. It may be too late to save her that money but I intend to fight to get this system changed. deckhanddave
  • Score: 5

11:26am Mon 14 Jul 14

msca99 says...

I’ve no doubt that a large percentage of payday loan customers don’t have too much complaint – people aren’t stupid, and the costs of payday lending are common knowledge…. I expect Wonga to enter the English language any time now, in a similar way to McJob. Take the money, pay it back, moan about how much it cost, repeat.

But what does this poor excuse for ‘research’ actually tell us? The fact that customers were treated “with dignity and respect” is meaningless. How is that defined? It can mean completely different things to a customer or a regulator and I suspect the ambiguity in the question is deliberate. Of course payday lenders treat you with dignity and respect when you’re borrowing from them… that’s just basic customer service. If they didn’t, people would just use a different payday lender.
http://creditspoint.
com/
I’ve no doubt that a large percentage of payday loan customers don’t have too much complaint – people aren’t stupid, and the costs of payday lending are common knowledge…. I expect Wonga to enter the English language any time now, in a similar way to McJob. Take the money, pay it back, moan about how much it cost, repeat. But what does this poor excuse for ‘research’ actually tell us? The fact that customers were treated “with dignity and respect” is meaningless. How is that defined? It can mean completely different things to a customer or a regulator and I suspect the ambiguity in the question is deliberate. Of course payday lenders treat you with dignity and respect when you’re borrowing from them… that’s just basic customer service. If they didn’t, people would just use a different payday lender. http://creditspoint. com/ msca99
  • Score: 0

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