UNISON, the UK’s largest union, today backed the ‘Charter to Stop the Payday Loan Rip-Off and renews its call to the Financial Conduct Authority to clamp down on payday sharks.
A snapshot survey of low paid workers by UNISON, found that one in five had been turned down for a loan or overdraft in the past two years and an increasing number are resorting to payday loans despite the exorbitant interest rates.
As a response, UNISON created a network of credit unions to help members drowning in debt. The service is aimed at enabling members to regain control of their finances, prepare for the future and be in a better position to cope with unexpected financial crises.
Dave Prentis, UNISON General Secretary, said:
“Payday loan sharks are rubbing their hands with glee as they take advantage of vulnerable people who are struggling to makeends meets.
“They unscrupulously give out loans with exorbitant interest rates without checking if people can afford to pay back. People’s debts are spiraling out of control as a result of loans being rolled over. This needs to stop.
“We support the Charter and encourage others to sign up to the petition which urges the Financial Conduct Authority and the Government to take tough action on payday sharks.
“Our members, particularly the low-paid, need to be protected from these dishonest companies.
“The union’s charity ‘There for You’ has been inundated with requests for help from desperate people who, for a whole multitude of reasons, have got into financial difficulties.”
Paul Blomfield MP said:
“I’m delighted that UNISON is backing the Charter to Stop the Payday Loan Rip-off. They’re a strong voice for working people and they join a growing alliance of charities, churches, campaigners and politicians seeking tough regulation of payday lenders.
“With living standards being squeezed, increasing numbers of people are being forced to turn to payday lenders. They find that small initial loans can quickly lead to massive and unmanageable debts. It has to stop.
“UNISON members and their families badly need tougher regulation of payday lenders, and can bring it about by signing up to the charter.”
More than 2,500 individuals, cross party MPs, consumer groups and charities have signed up the petition started by Paul Blomfield MP.