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Payday loan websites to be blocked by councils
11:10am Friday 6th September 2013 in News
Residents will be denied access to the websites of payday loan companies if they use council-owned computers.
All five councils in West Yorkshire, plus York, have joined forces to block the sites of almost 200 high-interest payday lenders, including well-known names such as Wonga.
Anyone attempting to access these websites on Council terminals in libraries, customer contact centres or on staff computers will now be redirected to an information page providing debt advice and alternative sources of affordable credit and banking services.
The agreement stems from an announcement last month that the Office of Fair Trading has referred the whole of the payday lending industry to the Competition Commission because of concerns over its impact on vulnerable citizens.
Across the six councils’ areas there are estimated to be 78,000 residents who have payday loans.
Councillor Imran Hussain, deputy leader of Bradford Council, said: “Many people are struggling financially in the current economic climate and we want to do our best to help them avoid payday lenders.
“Irresponsible lending can lead to people being sucked into a spiral of debt, making their lives and their family’s lives a misery.
“That is why we support these measures to block such websites and we have also made it a priority to support people who are on low incomes as far as we can. We have supported expanding credit unions which offer people the chance to apply for loans on much lower interest than they would get from the majority of lenders.”
Affecting 2.4 million residents and 67,000 council employees, the scale of the Yorkshire scheme has attracted criticism from representatives of of the payday lending industry.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, said: “Local councils are clearly entitled to take any action they deem necessary and we would support any initiatives that drive out irresponsible lenders. However, we would be concerned if, without evidence of its impact, this action prevented people in Yorkshire having access to responsible credit providers.
“Responsible lenders explain the costs up front in pounds and pence, use credit reference agencies to check your details and will not lend to you if they think it will make your financial situation worse.
YouGov research released this week shows that these measures are benefiting payday borrowers in Yorkshire with 98 per cent saying they fully understood the cost of their loan.”
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