Calls to ban 'pay-as-you-view' loans as they may cause debt problems
Calls to ban 'pay-as-you-view' loans as they may cause debt problems
- Thursday, 4 November 2010Anti-poverty campaigners are calling for 'pay-as-you-view' loans to be banned as they can lead vulnerable people into
debt problems.
Barnardo's is appealing to the government to reform the banking system so that those on a poor income can have access to credit, reports the Guardian.
It is thought that consumers resort to these loans, which can have interest rates of 40 per cent, as they cannot obtain any other form of credit.
These loans are usually obtained to pay for household goods, such as a TV, and the borrower repays the money by inserting coins into a meter.
In this way, they will end up paying more for the item than it is actually worth and consumers could end up in
debt problems.
Neera Sharma, the charity's assistant director of policy and research, told the news provider: "Exclusion from mainstream financial services means low-income families tend to use high-interest forms of home credit and accumulate a vast amount of debt."
However, a spokeswoman from moneyfacts.co.uk recently suggested that consumers are trying to get
debt-free over the uncertainty of job cuts.

Recent Debt Management Plan News
56% of Brits have no life insurance which could leave family with debt problems
Wed, 04 May 2011More than half of UK adults currently have no life insurance cover, which could mean their loved ones are left with
debt problems when they die...
Brits thinking about retirement advised to seek debt advice
Tue, 03 May 2011Consumers considering their retirement options have been advised to seek professional advice, as they may end up with
debt problems in the future...
Brits planning to attend a wedding should start saving to avoid debt problems
Thu, 28 Apr 2011Consumers concerned about getting into
credit card debt to pay to attend a wedding may want to use their savings instead...
Couples planning their big day can avoid debt problems by negotiating a cheap wedding
Wed, 27 Apr 2011Couples-to-be worried about needing
debt advice in the future after paying for a wedding can ensure they avoid accruing
debt problems by negotiating a cheap wedding...