Whilst short term lending can play a positive role in helping those with temporary cash flow problems, the high rates charged by pay lenders have left many families trapped into a dangerous spiral into debt from which they cannot escape.
Wonga’s going into administration on 20 August this year shows the lack of sustainability in this sector and it is vital that the UK Government provides information to the status of borrowers who had received money from the firm before it ran into difficulty.
The UK Government must use reserved powers to regulate the sector more effectively and the Financial Conduct Authority must enforce its rules on affordability of lending.
It is a disgrace that Westminster austerity has forced so many hard working families in Scotland to access funds from pay day lenders.
The case of Danny Cheetham is very concerning – lending and betting firms have a duty of care towards their customers and it is unacceptable for Mr Cheetham to be lent so much money to enable his gambling addicition. That is why my SNP colleague Ronnie Cowan MP has been campaigning for tighter control of Fixed Odds Betting Terminals which have been described as the “crack cocaine of gambling.”
At SNP Conference this month, Scottish Government Finance Secretary Derek Mackay announced the creation of a new financial health check service to provide advice to those in financial difficulty.
The SNP is calling on the UK Government to use this year’s UK Budget to put cash in people’s pockets by: introducing the real Living Wage, halting and changing Universal Credit, Reversing the cuts to housing support, reducing energy costs and ruling out a Hard Tory Brexit which has cost households an average of £900 already according to the Bank of England.