Plymouth City Council has said it is banning controversial payday loan websites from advertising on billboards and bus shelters in the city.
Plymouth is thought to be the first local authority to ban the websites with access to the 50 most popular payday loan websites also blocked across the Council’s entire computer network including libraries and community centres.
The Council is taking the action to protect residents from sky high interest rates that can lead to spiralling debt. The action comes as city watchdog, the Financial Conduct Authority, considers a blanket ban on advertising by lenders when it takes on regulation of the industry next year.
Councillor Chris Penberthy, cabinet member for co-operatives and community development, made the announcement in full council yesterday.
He said: “Plymouth’s advice agencies are taking calls daily from people who are running up huge debts that are causing stress and hardship to them and their families. We need to protect people and make it difficult for payday loan companies to operate in our city but we do recognise times are hard.
“We are working with our partners to make credit union services more easily available in the city centre, this is an affordable lending option for people that won’t trap them with massive interest rates.”
The Public Accounts Committee estimates some two million people nationally have payday loans. In Plymouth the estimate is 5,000 people. Unless the loan is repayed straight away the debt spirals as some companies charge around 5,000% APR.
Plymouth Citizens Advice Bureau considers that payday loans are the biggest threat to personal debt because they can be so easily accessed and have high profile advertising campaigns.
Steve Meakin, Money Advice co-ordinator for Devon and Cornwall and the chair of the Institute of Money Advisers, said: “It’s difficult to overestimate the harm payday loans are causing to Plymouth residents. The Citizens Advice Bureau is seeing an ever increasing epidemic of despair caused by these unscrupulous merchants of misery. Plymouth City Council’s initiative is really welcome and represents a constructive first step in combating the unacceptable face of the financial services industry.”