7:10am Tuesday 10th September 2013
By Emma Rigby
ACCESS to payday loan websites will be blocked in public buildings and libraries in west Cheshire as part of attempts to stop people falling into high-interest debts.
The decision, backed by both Cheshire West and Chester Council’s (CWAC) corporate scrutiny committee and executive, will apply to computers available to the public and those used by the authority’s 5,000 plus employees.
It will come into force from October 1 and follows a notice of motion brought to council by clr Adrian Walmsley, prompted by his concerns over ‘irresponsible lending and aggressive tactics’ employed by the pay day loan industry.
Clr Walmsley said that one of the main criticisms highlighted in a report published by the Office of Fair Trading was that lenders failed to carry out the basic checks on whether borrowers could afford the loans.
He said: “Statistics show that as many as one third of loans are either repaid late or not repaid at all and that 28 per cent of all loans are ‘rolled over’ and refinanced at least once.
“The practice of rolling over loans can all too easily lead to people becoming trapped in a spiral of increasing debt.”
Earlier in the year, the Citizens Advice Bureau reported that three in four payday borrowers who had contacted them for advice had been treated unfairly by their lender and could have grounds for complaint to the Financial Ombudsman.
Clr Walmsley’s call for an access block on council computers was referred to CWAC’s corporate scrutiny committee for review, with the committee agreeing that the authority has a duty to protect adults who felt they had no alternative but to turn to payday lenders.
Committee chairman clr Eveleigh Moore Dutton said: “The interest rates charged by the industry beggars belief – they are in the thousands of per cent – and they tend to target those least appropriate for lending.
“There is an old saying that ‘if you cannot afford to save you cannot afford to borrow’ but they seem to be prepared to squeeze people beyond that.”
Both the corporate scrutiny committee and executive has agreed that the authority should promote the benefits of using credit unions to help eliminate the use of loan sharks and payday loan companies.
In the meantime, CWAC’s information technology service is to investigate the possibility of having all attempts to access payday loan sites automatically redirected to the council’s websites giving advice on credit unions.
Advice on payday loans is also available by visiting your local Citizens Advice Bureau or calling them on 08444 111 444.
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