Families hit by the credit crunch are turning to so-called payday loans because they cannot access extra money from high street banks.
National TV adverts for one loan firm hit screens last week just as Office of Fair Trading research revealed a worrying increase in expensive short-term borrowing. And last night there were calls for the Government to clamp down on the loan firms amid fears that thousands of families could be plunged into spiralling debt.
Liberal Democrat Treasury spokesman Vince Cable said: “At a time when official interest rates are close to zero and inflation is very low or negative it is unbelievable that people are being charged thousands or hundreds of per cent in interest.
“Much of this can be attributed to the withdrawal of credit from struggling households who can no longer use banks and are being driven into these extreme and extortionate forms of credit. (more)
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