Calderdale Council is joining together with five other Yorkshire councils who in total represent 2.4 million residents and employ 67,000 employees, to block the websites of payday lenders from all council terminals – including those in libraries and face-to-face customer contact centres as well as all staff computers. This represents the single biggest initiative in the country in the campaign against what are described as predatory lenders.
In addition to this Calderdale Council is preparing to block such companies advertising on any Council owned asset and has recently launched a £100,000 fund for voluntary and community groups to deliver projects that support people with advice about benefits, welfare rights and better ways to manage their money.
This website blocking agreement follows on from the announcement last month that the Office of Fair Trading (OFT) has referred the whole of the payday lending industry to the Competition Commission because of concerns about the practices used by the industry and the impact on vulnerable citizens.
Anyone attempting to access payday lender websites on a council computer will instead be redirected to an information page which will provide information about alternative services provided by Calderdale Credit Union, and a link to Calderdale Citizens Advice Bureau who can provide specialist independent money and debt advice.
National charity Step Change has reported that 42% of young people aged between 16 and 25 who come to them for help have debts to payday lenders.
Cllr Tim Swift, Leader of Calderdale Council, said:
“We are proud to be part of this positive action to help draw attention to the issues surrounding payday lending, and to help residents find out about alternatives. We’re working hard to support people to manage their money better so they don’t have to rely on loans. We’ve recently launched a £100,000 fund, which voluntary and community groups can bid for, to give extra help and advice to families affected by changes to the benefits system.
“But where people do need to borrow money, we urge them to apply for safe and affordable loans from credit unions instead of payday loans companies. We’re also going one step further by preparing to restrict such companies from advertising on Council owned spaces.
“We know that good quality information and advice on financial, welfare and housing issues can help prevent people from falling into greater debt and needing more extensive support later on. It makes total sense to invest more into helping families cope better in tough times and hopefully become more resilient.”
Cllr Keith Wakefield, Leader of Leeds City Council and Chair of the Association of West Yorkshire Councils said:
“We are seeing more and more evidence of people finding themselves with serious debt problems after being enticed into taking out loans from payday lenders. A recent survey of 113 lenders by the Citizen’s Advice Bureau found 9 out of 10 applicants were not asked to provide proof that they could afford the loan. It can be no surprise that this sort of irresponsible lending leaves many people facing serious hardship. This is an industry which must face greater controls over their operations, but, until they do, we feel that it is necessary to take this action.”