Payday loan firms ‘preying on poor’ who face pressure at Christmas
Lenders are targeting hard-up households with “Christmas loans” charging annual interest rates of up to 648% Firms are using the expensive festive period to push pricey products, with some promising to have cash in borrowers’ accounts “in just 10 minutes” It comes as Britain’s biggest remaining payday loan provider, QuickQuid, is set to close US-owner Enova says it is leaving the UK market “due to regulatory uncertainty” The Money and Pensions Service has warned customers of QuickQuid not to be tempted to stop making repayments Doing so might mean their credit ratings could be hit and they could also face extra fees and charges, said Caroline Siarkiewicz, acting chief executive at the Money and Pensions Service Payday lenders are under strain due to a rise in compensation claims lodged by customers who believe were mis-sold loans they could not afford Similar issues triggered the collapse of former industry leader Wonga in 2018 and The Money Shop in June The Financial Ombudsman Service said 59% of complaints made to it about CashEuroNet UK, which trades as QuickQuid, between January and June were upheld Other loans firms are using Christmas as a time to sign-up borrowers. Loans At Home promises to deliver cash loans of up to £600 “directly to you”, but with interest rates at an representative annual percentage rate (APR) of 433 4%. My Quick Loan offers “Christmas loans” of between £100 and £5,000, with its website boasting “You could have cash in your account in just 10 minutes” But the firm quotes a loan with a representative APR of 648.6%. Another firm, Zipcash co.uk, offers loans of between £100 and £3,500 “in only 10 minutes”, with an interest rate of 97% The promotion of “Christmas loans”, has prompted crusading Labour MP Stella Creasy to demand caps on all forms of credit to protect borrowers Ms Creasy, who launched a campaign against high cost credit firms said: “These legal loan shark firms think Christmas has come early when they can rope cash-strapped customers into loans “We urgently need to expand access to affordable credit so that people don’t get stuck borrowing from these predators at sky-high rates ” The Mirror has contacted all the companies named for responses.