Liverpool City Council is banning payday loan firms from its IT network to help protect residents from accumulating high levels of debt.
The firms’ websites will be blocked at computers in the city’s libraries and other buildings.
The move comes after new research shows Liverpool people had one of the biggest average rise in payday loan debt in the last two years. In 2012 the average payday loan debt in the city was £1748, an increase of £463 on the previous year.
“It is clear that payday loan companies are targeting the poorest and most vulnerable people,” said Councillor Paul Brant, Liverpool’s Deputy Mayor.
“In the current economic climate there is a danger that more people resort to desperate measures but with payday loans they end up much further in debt because of the astronomical interest rates, which can be over 4,000%, these companies charge.
“As an authority we do not want to promote this sort of unethical lending so we are stopping public access to their websites.
“We know that because of benefit cuts, high levels of unemployment and fuel poverty many people are facing a real struggle to make ends meet,
“But there are better ways of getting help than using payday loans. Credit unions provide a much more responsible and affordable way of lending, there are debt counsellors how can provide impartial advice and people who have difficulties over such matters as council tax should come and talk to us about making arrangements to pay.
“Above all I would urge people, to think very carefully before taking out a payday loan and. as a council, we will be doing what we can to discourage their use.”
Liverpool Express questioned Councillor Brant about this move:
Why are you taking this action?
There is a lot of concern about the activities of payday loan companies and the way they provide loans to people who are often in desperate straits about their finances. The Office of Fair Trading has referred the way they operate to the Competition Commission. The figures show that a lot of people in Liverpool are tempted to use them and many end up much further in debt because of the huge interest rates attached to the loan. We do not believe that we should be helping these companies increase the financial burden on vulnerable people by allowing then to promote their services in our buildings.
Isn’t this censorship?
We are not stopping these companies from advertising their services elsewhere but we do not believe that we should allow public money to be used to help promote services which we believe cause a lot of harm to our residents. We block sites with pornographic material because of the harm they do – this is a similar move.
But payday loan companies are lawful –why should people be prevented from seeing their websites?
They may be legal – although their activities are to be investigated – but I would argue that the way they operate is certainly not ethical and that is why their sites should be blocked.
How can you be sure that you are blocking all the sites?
There are a lot of these sites and we are trying to identify as many as possible. However, we recognise that there could be new companies appearing as there can be changes of names so it may be possible that not all the sites can be immediately blocked. However, if we are made aware of any sites we have missed we will certainly block them.