Debt warning over rise in pay-day loans

Chief executive Neil Bradbury and volunteer advisor Kevin Shaw outside the new Citizen's Advice Bureau in Seaham.
Chief executive Neil Bradbury and volunteer advisor Kevin Shaw outside the new Citizen's Advice Bureau in Seaham.
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PAY-DAY loans have become “a plague”, according to a community support charity.

While the numbers contacting Citizens’ Advice Bureaux (CAB) in Wearside and County Durham have remanded steady, staff are dealing with more debt-riddled people in need of help after turning to pay-day lenders and loan sharks in desperation.

“We have seen a massive rise in terms of the plague from pay-day lenders and aggressive debts,” said Neil Bradbury, chief officer of East Durham CAB,

“One big problem facing some who take out these pay-day loans is they don’t have a salary, and they are taking it off people who are on benefit.

“What they do is they know when benefit is paid by definition of the agreement taken out, so when money is paid in, they get it before anyone else.

“So if someone’s borrowed £100 and they know they’re going to get £100 in benefit the next week, that solves the problem for that week, but the next week they realise they’ve got nothing again.”

“The other big problem is illegal money lenders, and we’ve had a talk from the Illegal Money Lending Team.

“We believe there are two or three illegal lenders are operating in this area, but unless our clients come forward about it we cannot be sure.”

He added: “The problem is people often think they are their friends because they are nice to them.

“We’ve seen a lot more problems because banks are not lending as much and people who have poor credit go elsewhere.”

Last year East Durham CAB, which recently opened a centre in Seaham, helped 3,760 people, an eight per cent rise from 3,506 the year before.

Of those, 1,624 called in its support for benefit issues, the greatest cause of concern for its clients, with 1,100 asking for help with debt. Many of those inquiries are made by the same people.

Sunderland CAB, based in Washington, dealt with 4,401 clients, a rise of seven per cent on 2011 when it handled 4,694 clients.

It has said that while debt calls have remained static, benefit enquires have risen by 49 per cent in the last year.

l East Durham’s CAB appointment line can be called on 586 2639, and its session details are on 587 2695, or people can visit its website at www.eastdurhamcab.org.uk

Sunderland CAB can be called on 416 6848 and its website can be found at cabwashington.co.uk

Twitter: @EchoEastDurham