Why I eight payday loans ; BANK OF DAVE'S CAMPAIGN AGAINST SCOURGE [Eire Region] [People, The (England)]
(People, The (England) Via Acquire Media NewsEdge) BANK of Dave boss Dave Fishwick today reveals his eight-point guide for borrowers in the clutches of "out of control" payday loan firms.
The charismatic businessman challenged greedy mainstream bankers in 2012 by setting up his own bank, Burnley Savings & Loans.
He told the Sunday People he was sickened by the service being offered. Already he lends Pounds 2.5million a year.
Now Dave, 42, is taking on ruthless payday lenders after being inundated with letters begging for help from people trapped in a spiral of debt.
Tens of thousands of desperate folk take out payday loans just to cover their fuel bills, mortgage and rent.
The Competition Commission is probing allegations that lenders exploit those who fail to repay loans on time and charge huge interest rates.
Dave said: "They're terrible people, they prey on the poor and vulnerable. Payday loans are being given to people who don't have a payday.
"People borrow Pounds 80, it turns into Pounds 500 and they just get deeper and deeper in. A girl told me she has to choose whether to feed herself or her four-year-old child because of repayments.
I thought, 'Let's have a go.'" Dave wants stricter regulations. He says loans should not exceed a third of monthly income. Interest should be a reasonable flat rate. And he would ban Continuous Payment Authority, which lets lenders take cash from clients' bank accounts at will.
His tips for borrowers are below.
firstname.lastname@example.org Consumer: Page 47 HIS 8-POINT PLAN TO HELP YOU BEAT LENDING TRAPS 1 IF you can't repay a loan, contact the firm at once and explain. Offer to make monthly payments and ask them to freeze the interest and charges. If they refuse, make the payments anyway. This will make it hard for them to take action against you as you are showing willingness to pay the debt.
2 IF you are offered a further loan to pay off an existing debt with them say NO. They will be really keen for you to borrow more money and incur more interest and charges. It's how they make money but it will only get you further into debt. Tell them that you want to agree a payment plan instead.
3 IF you agree a payment plan, make sure you cancel any card you gave them details of, or cancel any direct debit immediately. They are renowned for taking payments after you have agreed a plan.
4 IF the payday lender imposes a Continous Payment Authority order, you can stop it. Most people think you can't, but you can. Write a letter to your bank manager.
5 IF you default on a loan repayment and they use aggressive debt collectors to chase you, make sure you know your rights and tell them you are aware of these rights. Debt collectors cannot try to contact you at work or late at night. They should not try to contact you more than three times a week.
6 IF you feel you are being treated unfairly, contact the Office of Fair Trading. Payday lenders are nothing more than legalised loan sharks and can turn into unscrupulous, heavy-handed debt collectors.
7 If you are considering a payday loan, ask yourself two questions. One, will you be able to repay the loan in the short time limit? Two, are there alternatives such as a small loan from friends or family, a bank or credit union, advance pay from your employer, or asking for more time to pay bills? 8 Finally a word of warning. Taking out a payday loan can affect your ability to obtain future credit. So be very careful.
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