‘Dubious pay day loan companies’ are now blocked from all council computers in Tameside and Stockport in a bid to promote more trustworthy financial support systems.
This drastic measure comes in the wake of increasing numbers of people defaulting on council tax payments, feeding their family via food banks, and struggling to pay for essential utilities, the council has revealed.
The abundance of pay day loan companies in Tameside and Stockport is equally troubling. Tameside has 11 stores so far, along with countless, easily-accessible websites, the council believe residents are given too many opportunities to get into debt with these high interest companies.
Councillor Jim Fitzpatrick, Tameside’s Executive Member for Finance, said: “These pay day loan companies are the scourge of households up and down the country and prey on society’s most vulnerable people.
“What initially appears to be a good idea can quickly turn into a nightmare as the extortionate interest rates quickly mount up.”
With the proposal put in place on Wednesday afternoon, anyone attempting to access pay day loan websites are now redirected to the Tameside Help with Benefits website and the Credit Union, where advice on managing a household budget is readily available.
If the block proves successful, the council plans to introduce a scheme working in partnership with a not-for-company which will offer residents more affordable credit than pay day loan companies and door step lenders.
Chief Executive of the Consumer Finance Association, Russell Hamblin-Boone, which represents some of the largest payday lenders in the UK, said: “Tameside Council is clearly entitled to take any action it deems necessary and we would support any initiatives that drive out irresponsible lenders.
“However, we would be concerned that, without evidence of its impact, this action prevented people in Tameside and Stockport having access to responsible credit providers. Responsible lenders explain the costs up front in pounds in 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.”
Earlier this year councils in Salford, Bolton, Rochdale, Northampton, Dudley, Wolverhampton, and Sandwell carried out similar campaigns, and moves towards a ban are also being made in Kent and parts of Wales.
“As well as warning people about these companies and the dangers of taking out a loan with them, we also want to offer our residents an ethical alternative,” Cllr Fitzpatrick added.
“I hope this initiative will help those who feel they need a loan to contact the right organisations instead of falling into massive debt with these dubious pay day loan companies.”
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