The Consumer Finance Association (CFA) is an industry trade body that has received numerous political complaints regarding payday lender practices. In response, it recently published a study that depicts politicians as lacking knowledge of payday loan benefits. The study also claims that these lawmakers do not have their fingers on the pulse of the payday lending customer base.
Payday loan critics being targeted for offering debt solutions and advice to those struggling with payday loans. Are you in arrears with payday loans? Are you in a payday cycle? Do you depend on payday loans such as SafetyNet credit, Lending Stream, 24/7 Moneybox, Mr Lender, 118118 Money to keep you afloat? Contact us today to see how a debt management plan can get you out of the payday loan merry go round!
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The study conducted by the CFA compared comments from politicians and consumers regarding payday lending. According to the data gathered, the majority of consumers using payday loans feel that they are treated with respect and that the fees and charges related to this financing are clearly explained. Politicians, on the other hand, believe that payday lenders do not treat customers well and are not transparent regarding interest rates and other charges.
Based on this study, it appears that payday lending is a good option
However, a closer look reveals that the three hundred payday lending customers were selected from a single lender known for its high standards of practice. The study did not include questions about why some lenders use online debt forums to target customers.
Nor did it ask whether it was good practice to lend to consumers in a debt management plan, IVA, or bankruptcy. Debt advisers were not included in the study population, so there was no opportunity for them to reveal that many people seek their help regarding debt caused by payday loans.
The reality is that criticism of the payday lending industry extends beyond the boundaries of political classes
Many debt management advisers are very concerned about the negative impact of payday loans on personal finances. It is easy for people to become trapped in a debt spiral when they use payday lending. Many consumers have spoken out regarding lender practices including the encouragement to borrow more money than needed or roll loans from one term to the next, accruing interest, fees, and other charges.
To get a comprehensive picture of the payday lending industry, all parties involved must be questioned. A group of customers from various payday lenders throughout the UK should be included in the research. Private firms and governmental agencies charged with debt management should also be polled. Doing this may paint a different picture of the industry. If not, at least it will provide the viewpoints of all players within it.
Until a study of this scale is conducted, it is misleading to conclude that payday lenders are the targets of unfair criticism
It is also erroneous to determine that politicians are not in touch with the industry or the constituents they serve. For now, the issue must rest and the decision of whether to use this financing is left to consumers.
People who find themselves in debt caused by payday loans, credit card spending, or other issues should seek help. Advice and guidance are available from debt management professionals, some of whom offer a free debt assessment that identifies how quickly the debt can be cleared. Consumers who decide to take action have a variety of debt management solutions to consider.