Out-of-control payday loan companies are disregarding a code of conduct on responsible lending and leaving families drowning in the misery of unmanageable debt, a leading advice agency has warned.
Citizens Advice Scotland (CAS) revealed it had helped 50 people a day last year who were unable to repay a personal loan.
Its sister charity in England and Wales published a survey showing companies were still lending to people who were aged under 18, had mental health issues or were drunk when they took out the loan.
CAS spokeswoman Lucy Manson said there was equal concern about payday lenders operating north of the Border. She criticised companies for failing to adhere to a voluntary code of conduct introduced last November, with high interest rates, poor background checks and harassment among the common complaints.
The agency has been carrying out a survey to check whether companies are following the code. Ms Manson said: "Stories from customers south of the Border show that in many cases, lenders are falling short of keeping these promises. Unfortunately, our evidence here in Scotland shows that this echoes Scots' experiences."
The claims come at a time when Britain's biggest payday lenders risk being put out of business if they cannot prove to the Office of Fair Trading (OFT) they are behaving responsibly. The OFT is expected to announce whether it will refer the payday market for an investigation by the Competition Commission in June.
Citizens Advice said the OFT must take tough and immediate action after the trading watchdog gave 50 payday lenders a 12-week deadline in March to prove their good behaviour.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article