EuroDebt welcomes changes to Pay Day loan practices
DEMSA member, and leading provider of face to face debt advice and debt solutions, EuroDebt Financial Services, has welcomed the commitment of the Pay Day loan trade bodies to strengthen their codes of practice to help people with unmanageable debts.
Kevin Still, EuroDebt Director said: “Pay Day loans can be a great solution to short-term cash-flow problems, but can all-too-easily become a regular feature of an individual or family’s monthly financial management. Designed to provide a short-term fix, these loans can charge high interest rates and if not managed properly could actually make debt problems worse in the long-term. We have seen a rise in the number of clients with Pay Day loans within their list of credit agreements, often with several loans in quick succession.
“We know that almost a quarter of people (24%) that come to us for help do so because they have got themselves into a spiral of debt – and this has risen in the past year. As interest mounts, the debt spiral deepens and Pay Day loans can add to this misery if not paid on time.
“It is excellent news that Pay Day loan companies are taking this proactive stance and this week’s agreement is a significant step forward towards improving the reputation of the industry where avoiding consumer detriment is a key consideration. Our experience is that the majority of Pay Day loan companies who are a member of one of the recognised trade associations work hand in hand with appointed debt advisors like EuroDebt to help people through their debt problems.”