Councils are urged to block access to payday loan websites

Local authorities should block access to payday loan websites from council computers in a bid to protect vulnerable residents, according to a Willaston and Rope Ward Councillor.

Brian Silvester is calling for access to payday loans websites to be blocked on council computers in libraries, offices and community facilities. Instead he wants local authorities to help residents secure affordable credit.

He said: ‘Some payday loans are no more than legalised robbery, with rates of interest at an unbelievable 3000% and more. Those who can least afford it are paying astronomical interest rates. Many are not aware on how badly they are being ripped off.’

‘Cheshire East Council should be determined to use its voice and influence to guide residents towards affordable credit such as credit unions and protect them from falling into a high interest debt trap. Also the council should be calling on the high street banks in the borough to start offering micro-loans to people in debt.’

Yesterday, Citizens Advice issued a warning over payday lenders’ after finding three out of four people struggled to repay the loan. It is urging the OFT to immediately ban these lenders, saying they are causing real harm to borrowers.

Mike Dixon, deputy chief executive for Citizens Advice told The MJ the current round of welfare reforms, centred on council tax benefit localisation, has really been about cuts, but the introduction of Universal Credit (UC) would mean a much more fundamental change to how people have to budget and think about money.

‘If we get the support for this wrong locally it’s going to put rocket boosters under the pay day loans industry,’ Mr Dixon said.

‘And one thing we’re particularly worried about in terms of councils is people being paid UC, taking up big pay day loans, having their bank accounts emptied by pay day loans providers and then that having a huge impact to council tax collection and the use of bailiffs,’ Mr Dixon added.

Last year, Dundee City Council blocked access to payday loanswebsites from all its computers in a bid to stop people getting into debt.