Payday lenders in the UK face a new barrier to advertising their services: city and regional governments. Cheshire East Council has taken action against lenders that they claim prey on the community by blocking payday loan websites from library and city-owned computers.
While the block does not affect home Internet users, the council hopes that limiting access to payday lending websites on public computers will block the city’s lower-income individuals from being able to access the loans. The block was put in place after the council received complaints from people that were ‘harassed’ by lenders.
Payday loans have historically been targeted at lower-income families that depend on their incomes for week-to-week bills and expenses. With household incomes on the decline, the loans have increasingly been targeted at individuals and families in higher income brackets that are struggling to afford their monthly bills.
While Cheshire East is the first local government in England to ban the loans, it isn’t the first in the UK. Dundee and Renfrewshire both blocked loan websites from their public computers in an effort to reduce predatory lending. Several other councils are reportedly considering the idea in an effort to tackle predatory lending.
Payday lending is a £2 billion industry in the UK, with revenues growing every year as more families turn to the loans. The average London-based borrow has debts of over £1,850 – up from just £563 two years ago. The increase in debts has sparked a wave of discussion regarding the restrictions that could be imposed on lenders.
Future steps involve the government holding discussions with payday lenders and debt charities as part of a crackdown on irresponsible lending. Lenders will discuss their services with consumer minister Jo Swinson, as well as discussing how their services can be responsibly advertised with several debt and credit charities.
