Jenny Rathbone AM has raised the abuse of data protection by payday lenders with Vaughan Gething, Deputy Minister for Tackling Poverty. She asked the Deputy Minister to take action to stop high interest lenders encouraging vulnerable people to take out loans.
She spoke about the experience of a Cardiff resident who is recovering from mental health problems. He applied for a pay day loan from Wonga in October 2013. When his request for a loan was declined he was subsequently bombarded by other providers with offers of easy access high interest credit. He received more than 350 calls, nearly 700 texts and more than 1000 emails; many offering more money than he could ever hope to pay back while receiving benefits. The almost constant contact pushed the vulnerable man backwards in his recovery and he raised the matter with Cardiff Mind who were supporting him at the time.
Jenny Rathbone AM said “He was refused a loan with a message, which said, ‘We can’t help you, but we have friends who can’. This then followed with his details being spread about to every other pay-day lender that it could get its hands on. I am extremely concerned, first about the sharing of his details without his permission, but also about the way in which these pay-day lenders are collaborating together to target vulnerable people who may be tempted to take on loans that they simply cannot afford”
In reply, the Minister said “This is a matter that we have taken up directly with representatives from the pay-day loan industry. The Minister made it very clear that he disapproved of not only their practices, but the way in which they approach the most vulnerable people with this type of repeated, persistent attempt to drive people further into debt. It is a matter of real concern.”
The man who applied for the debt in October 2013, told Jenny “the harassment was almost constant and I felt trapped, especially considering the only way of stopping the text messages from lenders was to text “STOP” at the cost of £3.50 a text. As there seemed to be almost limitless providers this was just not an option.
These companies target the vulnerable and their tactics can have a real effect on those suffering from mental health problems. I would like to thank Jenny Rathbone for taking up this matter and her colleague Jo Stevens who has written to the Financial Conduct Authority.“
