Simon Read: Lenders shouldn't target gamblers

 

Ed Miliband's call this week for an overhaul of planning laws to prevent payday lenders, pawnbrokers and bookmakers from swamping high streets is long overdue.

The number of payday loan firms operating on high streets leapt by 20 per cent last year, while the presence of betting shops and pawnbrokers also increased. But, and it's a point that the Labour leader didn't make, there's growing concern over the number of payday lenders that are opening up next to bookies.

Last year I noticed a branch of payday lender The Money Shop in Earl's Court in west London handily placed next to a bookies. Letting a payday lender target gamblers doesn't seem a good idea. Who is more likely to be tempted by an offer of instant money than a gambler who has just lost a packet?

Since then I've noticed more "coincidences" of payday lenders next to bookies. The Kingston branch of The Money Shop is also placed handily next to Eden Bookmakers. In Morden in south London I spotted a branch of the Cash Exchange next to Stan James Bookmakers.

There are more around the country, as people have pointed out on Twitter this week. Surely they can't all be coincidentally placed?

The proliferation of payday lenders is partly due to banks and building societies abandoning their branches.

As Mr Miliband said: "If a bank branch closes down, there's nothing a council can do if a payday loan shop wants to move in and open up in the same place, even if there's another lender next door."

Or even if there's a bookies next door, which I find a lot more sinister.

Credit desperation is creating crooks

The level of mortgage fraud has more than doubled since the start of the credit crunch. And Experian said it expected fraudulent applications to continue to rise throughout 2013, driven by the ongoing squeeze on household incomes and benefits, and stricter credit and lending criteria.

Its research said that people in routine urban occupations were responsible for 21 per cent of first-party fraud cases while young professionals and well-educated people were responsible for 14 per cent more.

These are not typical criminal classes. They're driven to the crime by difficulties in getting a loan. It's another example of how the greedy actions of the banks penalised us all.

The millions in the red to suppliers need help, not charges

Why are five million households now in debt to their energy supplier? The number has soared by more than a million in the last year while average bills have climbed almost £100 to £1,353, according to uSwitch.

It may be partly because a quarter of households have been incorrectly billed by their energy supplier, often leading them to receive a sudden shock demand for the underpayments.

But it's also because people in debt often tend to ignore bills in the misguided hope they will simply go away.

Dealing with the growing debt is proving to be a problem for many, with just over two in ten – 22 per cent – of those in debt to their supplier turning a blind eye to it in the hope that the amount they owe will go down naturally over time.

Worryingly, some people expect to move onto a prepayment meter in order to get control of their debts. While the figure is just 2 per cent according to the research, those who do switch will end up being charged more for their energy.

That's not right. Energy firms must do more help people in arrears – not just switch them to a more expensive way of paying.

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