Payday Loans

Baroness Howarth of Breckland Excerpts

Tuesday 10th January 2012 Lords Chamber

[Baroness Howarth of Breckland]

My Lords, does the noble Baroness not agree that people who take out these loans are usually the poorest in our society and have the least understanding of what even an APR is—never mind the interest rate? Does she not also agree that it is crucial that such people are able to get help from places such as citizens advice bureaux because they are local, or from groups that have outreach, rather than having to find credit unions that such people often do not understand? As the Government are so determined to tackle this problem, what is she going to do to encourage the CABs and outreach groups to move forward?

[Baroness Wilcox]

As the noble Baroness knows, a great deal of talk is going on with the CABs regarding the possible new range of duties that they will be delivering in the high street, which is, as she said, where people are and want to be. They do not necessarily want to join a credit union. They can go to other places for free debt advice but, inevitably, people need this money at the last minute for reasons that are very important to them. They are not going to seek advice, but they will need to know where it is when they need it. What we would like to do, and what we are pushing for in the industry, is ensure that before that money is loaned such companies make sure that people understand exactly how much money they will have to repay. I will take up any suggestions that the noble Baroness may have.