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MSP calls on Scottish Government to meet CAB over payday loans

Highlands and Islands (Scottish Labour) MSP, Rhoda Grant is calling on the Scottish Government to meet with the Citizens Advice Bureaux in order to explore how they can implement a number of recommendations published in a recent CAB report ‘Payday Loans: A Mayday Call’.

Rhoda Grant MSP who has led the charge against the payday lenders across the region wants to see new measures introduced to help curb the increasing levels of personal debt across the Highland and Islands. The Citizens Advice Bureaux in Scotland are dealing with over 100 cases involving payday loans every week, and last month the CAB published a new report on ‘Payday Loans: A Mayday Call’ which concludes with a series of recommendations to help mitigate the worst impacts of irresponsible payday lenders.

The report recommends that Payday Lenders and the Scottish Government do the following.

- Introduce a real-time credit recording or date sharing system to ensure multiple loans cannot be taken out from lenders before credit reports are updated.

- Agree to attend a CAS round-table meeting in 2014 where CAB client case studies highlighting breaches of the Good Practice Customer Charter will be made available to lenders.

- Provide all high-school first years with a starting deposit in a Credit Union account to encourage prudent saving and membership of local Credit Unions.

The report also includes further recommendations to be introduces by Local Authorities, The U.K. Government, Financial Conduct Authority and Banks operating in the UK.

Mrs Grant said: “Payday lenders are increasingly targeting their advertising towards younger people, I think it is crucial that we make young people aware of the risks of getting into debt by using these legal loan sharks and encourage them to use alternatives.

“I have written to the Scottish Government asking if they will meet with CAB to discuss the recommendations in this report. Something we could be doing right now is encouraging schools to invite Credit Unions in to provide financial advice in order educate young people on the risks of payday loan debt and the benefits of joining a credit union.

“The Payday lenders have got away with too much for too long. It is time the Scottish and UK Government clamp down on these legal loan sharks and help prevent more people falling into crippling levels of debt.”

 

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