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Banks hold answer to consumer choice on short-term credit

16 October 2013

A straightforward, quick way to take on payday lenders is for banks to offer personal micro-loans, says Citizens Advice as Labour Leader Ed Miliband announces long term plans to boost funding for credit unions.

Citizens Advice Chief Executive Gillian Guy said:

“The proliferation of payday loans is a symptom of the squeeze on living standards. There is a clear demand for short-term credit, and while boosting credit union services could offer some help in the long term, consumers need more choice now.  

“High street banks have been let off the hook by the lack of pressure on them to enter the short-term credit market. Banks need to offer a responsible alternative to payday loans like an affordable personal micro-loan.

“Citizens Advice Bureaux see the hardship caused by payday loans on a daily basis.  Some people are being given loans without proper assessments as to whether they can pay them back. Many see debts balloon as their loans are rolled over and others find their bank accounts empty after the misuse of continuous payment authorities.

“At the British Bankers' Association’s international conference today I will be talking to banks about how they should be more innovative in the services they offer. This includes entering into the short-term credit market and looking at ways they can help people save money on the things they buy.”

Notes to editors:

  1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
  5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.