Pay day loans sites blocked by council

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A council move to block pay day loan websites from its 7,000 computers has been widely praised by financial campaigners.

All Derbyshire County Council office and public library computers will be affected by the decision, which will see 
anyone trying to access the sites – which sell short-term, high-interest loans – 
re-directed to sources of safer loans such as Credit Unions and financial support services.

Derbyshire County Council’s cabinet member for health and communities, Councillor Dave Allen said: “The action we’re taking will not only discourage access to pay day loans but will also demonstrate our concern as a community leader about the significant financial and social costs.”

The decision has been praised by financial 
support groups, including 
Colin Hampton of Derbyshire Unemployed Workers Centre.

He said: “I would like to congratulate the council and their initiative as these firms are preying on people who are the most vulnerable.

“They argue that they are fulfilling a need but there are other ways that people can access affordable loans, not at the extortionate rates they are charging.”

Karen Peck, a Credit Union manager, added: “I express my support for what is an extremely important move in combatting the high interest, unscrupulous lenders.”

Russell Hamblin-Boone, chief executive of the 
Consumer Finance Association which represents some of the largest payday lenders in the UK, said: “Derbyshire County Council is clearly 
entitled to take any action it deems necessary and we would support any initiatives that drive out irresponsible lenders.

“However, we would be concerned that, without evidence of its impact, this action prevented people in Derbyshire having access to responsible credit providers. Responsible lenders explain the costs up front in pounds in pence, use credit reference agencies to check your details and will not lend to you if they think it will make your financial situation worse.”

It has also been announced that the Government is to introduce a new law to cap the cost of pay day loans.

The level of the cap has not yet been revealed, but will be decided by the new industry regulator the Financial Conduct Authority (FCA).

The Government says there was growing evidence in support of the move, including the effects of such a cap already in place in Australia.

But the industry has hit back saying the move could restrict credit, and encourage more illegal lending.

The cap will be included in the Banking Reform Bill that is already going through Parliament.

Chancellor, George Osborne said there would be controls on charges, including arrangement and penalty fees, as well as on interest rates with such loans.

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