New figures have revealed that the number of individuals asking for help with their payday loan debts has rocketed by 116% in the first six months of the year.
The report from money charity, National Debtline, showed that compared to 2011, the number of borrowers struggling to repay high interest loans has soared in 2012.
As austerity measures have bitten hard and banks have clamped down on their lending policies, many households have turned to payday loans as the only means of finance they are able to obtain. However, with many failing to carry out affordability checks and hefty charges for non-payment, an increasing number of individuals have found themselves caught in unmanageable debts as a result of the loan.
The National Debtline released figures showing the number of telephone calls received regarding problems with payday loan debts has climbed by 116% in the first six months of 2012, compared to the same period during 2011.
The news led the head of the Money Advice Trust, Joanna Elson, to urge the government to do more to halt the problems being caused by high interest borrowing in the UK.
Ms Elson said that payday loan firms were obliged to follow guidelines set out by the Office of Fair Trading on Irresponsible Lending, but insisted that a large number of companies were blatantly failing to do so. She said that self regulation and a voluntary code would no longer deliver the radical changes to the sector needed and led calls for action against the sector.
The head of the Money Advice Trust said that payday lenders needed ‘strong scrutiny’ from official sources ,including the government ,in order to force compulsory change and much needed action to prevent more consumers from being swallowed by ‘the tide’ of payday companies.