This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/money/2013/jul/11/rise-payday-loan-borrowers-help-stepchange

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
Huge rise in payday loan borrowers seeking help, says StepChange Huge rise in payday loan borrowers seeking help, says StepChange
(2 months later)
More than 30,000 people with payday loans have sought debt advice from the charity StepChange in the first six months of 2013 – almost as many as in the whole of 2012.More than 30,000 people with payday loans have sought debt advice from the charity StepChange in the first six months of 2013 – almost as many as in the whole of 2012.
The charity said that between January and July it advised 30,762 people struggling with high-cost short-term loans, against a total of 36,413 in the previous 12 months.The charity said that between January and July it advised 30,762 people struggling with high-cost short-term loans, against a total of 36,413 in the previous 12 months.
The figures come as Paul Blomfield MP prepares for a second reading of his private member's bill calling for more regulation of the sector, and will further fuel opposition to the industry which was recently referred to the Competition Commission.The figures come as Paul Blomfield MP prepares for a second reading of his private member's bill calling for more regulation of the sector, and will further fuel opposition to the industry which was recently referred to the Competition Commission.
Although payday lenders including Wonga and the Money Shop argue that they are fulfilling a need for emergency borrowing, and that annual percentage rates often in excess of 4,000% are a misleading way of showing the cost, critics accuse them of irresponsible lending and say borrowing costs can quickly spiral.Although payday lenders including Wonga and the Money Shop argue that they are fulfilling a need for emergency borrowing, and that annual percentage rates often in excess of 4,000% are a misleading way of showing the cost, critics accuse them of irresponsible lending and say borrowing costs can quickly spiral.
StepChange said the amounts owed by its clients increased only fractionally in the first six months of 2013, rising by £8 to £1,665, but it was alarmed by the continued growth in the number of people with more than five payday loans.StepChange said the amounts owed by its clients increased only fractionally in the first six months of 2013, rising by £8 to £1,665, but it was alarmed by the continued growth in the number of people with more than five payday loans.
In 2012 a total of 7,221 people had five or more of these debts, while between January and June it was contacted by 6,663 people in that position – "a clear indication that lenders are failing to conduct adequate affordability checks," it said.In 2012 a total of 7,221 people had five or more of these debts, while between January and June it was contacted by 6,663 people in that position – "a clear indication that lenders are failing to conduct adequate affordability checks," it said.
In one case seen by the charity in February, a client who initially borrowed £150 from a high street lender two years ago had seen the debt grow to £15,000.In one case seen by the charity in February, a client who initially borrowed £150 from a high street lender two years ago had seen the debt grow to £15,000.
Ahead of Friday's second reading of his bill, which calls for tougher rules on advertising and caps on loan sizes and charges, Blomfield said tough regulation of the sector was long overdue.Ahead of Friday's second reading of his bill, which calls for tougher rules on advertising and caps on loan sizes and charges, Blomfield said tough regulation of the sector was long overdue.
"These shocking figures from StepChange show the huge growth in the number of people who are getting into debt as result of payday loans," he said. "Payday lenders are targeting people who are short of cash and claiming to offer help, but their massive interest rates, rip-off charges and misleading advertising often just push vulnerable people further into a spiral of debt.""These shocking figures from StepChange show the huge growth in the number of people who are getting into debt as result of payday loans," he said. "Payday lenders are targeting people who are short of cash and claiming to offer help, but their massive interest rates, rip-off charges and misleading advertising often just push vulnerable people further into a spiral of debt."
The charity Citizens Advice called on MPs to back the bill, saying it had seen some "absolutely horrifying" cases involving payday loans in the past month.The charity Citizens Advice called on MPs to back the bill, saying it had seen some "absolutely horrifying" cases involving payday loans in the past month.
It said one borrower had contacted advisers saying they had contemplated suicide after being contacted 20 times a day by a lender who even called their employer to chase their debts, while another had been left with just £1.17 to live on after a lender drained their account.It said one borrower had contacted advisers saying they had contemplated suicide after being contacted 20 times a day by a lender who even called their employer to chase their debts, while another had been left with just £1.17 to live on after a lender drained their account.
On Wednesday it emerged that 11 payday lenders have left the industry in recent weeks after the Office of Fair Trading told them to clean up their act.On Wednesday it emerged that 11 payday lenders have left the industry in recent weeks after the Office of Fair Trading told them to clean up their act.
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.