Member Article

West Yorkshire councils fight against payday lenders

Councils across West Yorkshire are joining forces to protect people living in the area from payday lenders, one of the fastest growing parts of the financial services sector in recent years.

Six councils have got together to block the websites for all known payday lenders in the country.

All councils in West Yorkshire – Bradford, Calderdale, Kirklees, Leeds and Wakefield - along with City of York Council have taken the step to block the sites of almost 200 high interest payday lenders.

The councils represent 2.4 million residents and employ 67,000 people and will block the websites of all known payday lenders from all council terminals – including those in libraries and face-to-face customer contact centres as well as all staff computers.

This agreement follows the announcement last month that the Office of Fair Trading (OFT) has referred the whole of the payday lending industry to the Competition Commission because of concerns about the practices used by the industry and the impact on vulnerable citizens. Although a few other councils across the country have also taken this step, this announcement represents the single biggest initiative in the country in the campaign against what are described as predatory lenders.

Anyone attempting to access payday lender websites on a council computer will instead be redirected to an information page which will provide information about sources of money and debt advice and alternative sources of affordable credit and banking services through local credit unions.

It’s estimated that across the six councils’ geographic areas there are likely to be around 78,000 residents who currently have payday loans. The payday lending industry has been one of the fastest growing parts of the financial services sector over the past five years and there are fears that it is having a significant impact on the lives of many people. National charity Step Change have reported that 42% of young people aged between 16 and 25 who come to them for help have debts to payday lenders.

Councillor Keith Wakefield, leader of Leeds City Council and chair of the Association of West Yorkshire Councils, said: “We are seeing more and more evidence of people finding themselves with serious debt problems after being enticed into taking out loans from payday lenders. A recent survey of 113 lenders by the Citizen’s Advice Bureau found 9 out of 10 applicants were not asked to provide proof that they could afford the loan. It can be no surprise that this sort of irresponsible lending leaves many people facing serious hardship. This is an industry which must face greater controls over their operations, but, until they do, we feel that it is necessary to take this action.”

Leeds City Council is also organising a major national conference in Leeds on 25 October, devoted entirely to the subject of high cost lending and how to develop strategies to help citizens who find themselves trapped in a spiral of unsustainable debt. Speakers at the conference will include prominent national figures from the advice sector, the Department for Work and Pensions, Member of Parliament, Church of England and the world of sport.

This was posted in Bdaily's Members' News section by Anna Addison .