Most payday loans are used for buying food
Four in every five people taking out payday loans say they are forced to do so to buy food, research suggests.
The latest data appears to confirm the view of campaigners that high-cost credit providers are profiting from vulnerable people. One-fifth of those who applied for payday loans were not even asked by lenders if they had jobs, a study found.
On Thursday, the Government’s financial watchdog is due to unveil strict new rules for payday lenders. The debt counsellor Christians Against Poverty (CAP) – which conducted the latest research – said the move could not come soon enough. Its chief executive, Matt Barlow, said: “Some elements of the industry have worked hard to improve their practices but our findings show irresponsible lending still looms large.
“We want to see regulations that insist on appropriate affordability checks, including a mandatory sign-up to a credit reference firm which will work in real-time, to stop people taking out multiple loans.”
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