‘Avoid pay day loans’

Press Eye Ltd -  August 3rd 2010. The scene at Derry early this morning as PSNI officer investigate the car bomb which exploded shortly after 3 am. The Mayor of Derry, Councillor Colum Eastwood chatting to Speaker of the House Willie Hay at the scene.'Photo Lorcan Doherty Presseye.com

Press Eye Ltd - August 3rd 2010. The scene at Derry early this morning as PSNI officer investigate the car bomb which exploded shortly after 3 am. The Mayor of Derry, Councillor Colum Eastwood chatting to Speaker of the House Willie Hay at the scene.'Photo Lorcan Doherty Presseye.com

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People in Derry struggling with personal debt have been urged to seek help and warned off short term pay day loans.

SDLP MLA Colum Eastwood says rather than seek short term credit those finding it hard to manage debt should instead seek professional help and advice.

“Problems associated with personal debt are particularly acute at this time of year. I have been approached by many families who are not only facing the burden of debt but the psychological stresses these inflict,” he says.

The Foyle MLA also said that there was now an onus on government to impose tighter controls over pay day lenders.

“From a governmental perspective however it is imperative that the practices of payday loans are more tightly regulated.

“The current system of licensing through the Office of Fair Trading is inadequate. The OFT has little powers of enforcement and its resources limit its reach over these financial enterprises.”

Inflated interest rates

Payday loans typically offer short term credit but at an inflated rate of interest.

Mr Eastwood says it is often the most vulnerable who apply for short term credit.

“In this age of austerity where the difficulties of access to credit have become commonplace, it is essential that strict regulation is imposed upon companies who seek to make profit from those most vulnerable in our society.”

The former Derry mayor says anyone struggling with debt should seek help.

“I would encourage anyone who finds themselves in this scenario to seek the advice of those experienced in dealing with debt issues.

“My own constituency office or the Citizens’ Advice Bureau are always willing and able to aid those in need of any help or advice,” he says.