MP's fears over rise of pay day loan shops
An MP has spoken out against the increase in pay day loan companies offering quick cash to customers, which are becoming an increasingly common sight on high streets in the Black Country and Staffordshire.
Ian Austin, who represents Dudley North, says he is concerned about the growing number of firms offering small-term loans saying it could lure borrowers into ballooning debts.
He said the number of people seeking pay day loans nationwide had increased by 300 per cent in the past two years. The MP said in Dudley High Street, the number of shops offering quick cash has risen to six in recent months. They include The Money Shop, Speedy Cash and the Cheque Centre.
In Wolverhampton there are four within the ring road while Sandwell has five and Walsall two. There are two in Cannock, two in Kidderminster and three in Stafford's main precinct.
Pay day loans are described as small short-term loans which often have very high rates of interest.
Talks
People often turn to them to tide them over until their next wage or salary cheque.
Mr Austin believes the Government should cap the cost of credit and he would promote the work of those offering more affordable loans, like credit unions.
He added: "I am going to talk to the council to see what more can be done to promote the work of lenders like credit union Castle and Crystal in Dudley."
Mr Austin said that, unlike pay day loans companies, the credit union offered affordable loans with modest rates of interest.
Spokesman for the pay day loan company Cheque Centre, which has branches in the region including Dudley, Jason Wassell, said: "Our average loan is about £200 until pay day, and most customers have no trouble paying when their loan is due. We are always happy to discuss our business with community leaders."
