Long raises payday loan concerns

Alliance MP Naomi Long has called for tougher regulation of payday loans companies after revealing she had recently been solicited by one such organisation alluding to a previous credit application she made with them, an allegation that was false.

East Belfast MP Mrs Long, speaking during a House of Commons debate on payday loan companies today (Monday), said the company had contacted her in relation to a request for a loan she had allegedly made. Knowing that not to be the case, she wrote to the CEO of the company seeking an explanation: however, none was provided until she tweeted the letter to see if others had received similar correspondence. It has now transpired that her details were obtained when a fraudulent application was made in her name, details which were then used in a marketing trial, breaching data protection.

Mrs Long, who has written to the Financial Conduct Authority and signed a Parliamentary charter calling for action on the issue of payday lenders, said it proved again that further regulation of the industry was needed.

“Debt is a growing problem for many of my constituents. In the current financial climate and with changing employment patterns and welfare reform, people are finding it harder to make ends meet. Payday loans offer the illusion of quick and easy credit, but it can be at significant cost in the long-term. Unmanageable debt has a corrosive effect on people’s lives, including on people’s physical and mental health.

“Regulation of the sector is key to prevent people taking multiple loans, to check affordability before lending, to introduce caps on total cost of loans and on default charges, to deal with aggressive marketing in the sector and the management of people’s personal information.

“In the case of the unsolicited letter which I received, whilst the company have provided an explanation of sorts, it simply raises more questions as to how they handle personal data. I was never informed of any attempted fraud, nor I have never been advised of any criminal investigation into this attempted identity crime. Further, details obtained in this way should never have been used in a marketing trial.

“Remarkably, during the debate, another MP highlighted that she had had an almost identical experience in the past. This highlights that payday lenders need to be more heavily regulated to ensure that the use of personal details is carefully controlled.

“In my constituency, we fortunately have several excellent services such as local Credit Unions, the Christians Against Poverty charity and the StepChange free debt advice group, but this is not necessarily the case everywhere.

“What we need to do is deal with the underlying issues of poverty, which gets people into these situations in the first place, and also invest in economic education that will ensure people understand the consequences of taking such loans and, preferably, allow people to manage their money better to avoid having to rely on payday loan companies at all.”


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