Council bans pay day loan sites from its computers
9:36am Tuesday 10th September 2013 in News
Council bans pay day loan sites from its computers
Cheshire West and Chester Council is planning to block access to pay day loan sites from all its computers from next month in a bid to save people from getting trapped in "a spiral of increasing debt."
The decision - backed by both the council's corporate scrutiny committee and executive - will apply both to computers available to the public and those used by the authority's 5,000-plus employees.
Councillor Adrian Walmsley, who criticised the "irresponsible lending and aggressive tactics" used by the pay day loan industry, said Office of Fair Trading findings indicated clearly that lenders failed to carry out 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 this year the Citizens Advice Bureau consumer service had 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.
After reviewing Cllr Walmsley's call for a computer block the council's corporate scrutiny committee agreed that the authority had a duty to protect adults who felt they had no alternative but to turn to payday lenders.
Committee chairman Cllr Eveleigh Moore Dutton: "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."
Wirral Council introduced a similar ban for all its computers last month.
