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People with logbook loans are ‘overloaded’ with debt

21 Gorffennaf 2014

Citizens Advice has today raised concerns that people taking out logbook loans are overloaded with debt, as new evidence reveals they have twice as many debts as other borrowers.

The national charity analysed more than 23,000 cases of significant debt problems handled by bureaux between April and September 2013, 127 of which involved a log book loan (also known as bills of sale). The findings show, on average:

  • Logbook loan debts were worth more than double that of payday loan debts (£2,500 compared to £1,000).
  • People with logbook loans had a total of ten debts, including other forms of credit, that’s double the number of loans held by all debt clients (five).
  • 57% of clients with logbook loans also had one or more other type of high cost credit.
  • 37% of clients with logbook loans also had one or more payday loan.
  • The total amount of debt across all loans for people with logbook loans was £13,500.

The new research also finds that 40% of people who took out a logbook loan are in work, with 33% unemployed and 27% not working due to things like caring responsibilities or ill-health.

Citizens Advice is concerned unscrupulous logbook lenders are handing out loans to people in desperate financial situations without carrying out any proper checks to establish it they can afford to pay back the loan.  Evidence released by the charity earlier this year found that there was a lack of proper checks to make sure the borrower could afford the repayments and some borrowers did not have the terms of the loans clearly explained.

Citizens Advice Chief Executive Gillian Guy said:

“Predatory logbook lenders are driving people into debt.  Our analysis shows people taking out these loans are often in acute financial strife but lenders aren’t giving all of the information needed for borrowers to decide if a loan is right for them.  

“Any decent lender knows it is irresponsible to lend to people who already struggling.   Yet logbook lenders are showing a complete disregard for their customers by using outdated language, not checking if loans are affordable and not treating people fairly.  People struggling with their finances should be directed towards advice, not more debt.

“Logbook loans can be a particularly toxic form of credit as some lenders combine the risk and poor checks of a payday loan with threatening behaviour often used by bailiffs.  A change in the law to offer the same protections as hire purchase agreements for logbook loan borrowers is needed to protect people.”

When working mum Claire* was unable to work for six months after a car accident, she took out a series of payday loans and then went to a logbook lender for a larger amount.  She borrowed £3,000, repaying £65 a month – but later found out only £20 of the payment was actually going to pay off the debt.

After being made redundant, John* decided to go self-employed and started a valeting business.  He borrowed £800 only to find he faced a £5,000 repayment bill. When the business didn’t make the money he expected, and he struggled to keep up the £150 a month repayments, the firm took away the valet van but said he still had debts of £7,800.

In April this year, Citizens Advice found the number of logbook loans taken out this year could reach 60,000; a rise of 61% on 2011.

Research released by Citizens Advice in February, which looked at problems experienced by people who had taken out a logbook loan, found:  

  • 14% experienced harsh debt collection practices;
  • 28% were not treated fairly or appropriately by the lender;
  • 8% were hit with high charges for defaulting on their loan;
  • 17% had not had the terms of the loans clearly explained in a way they understood;
  • 9% had a lack of proper checks to make sure the borrower could repay;
  • 17% had their car taken away despite not being the original borrower.

*names have been changed

Notes to editors:

  1. Citizens Advice analysed more than 23,000 cases of significant debt problems handled by bureaux between April and September 2013.  The study broke down the different types of debt in order to allow further analysis of cases where people had taken out a logbook loan.
  2. Citizens Advice calculated that logbook loans could reach up to 60,000 this year by multiplying the number of loans registered in the first two months of this year by six, to give a twelve month estimate.
  3. Citizens Advice analysed 117 logbook loan client cases recorded in bureaux from 1st February 2011 to 7th January 2014 and 145 client cases recorded through the consumer helpline from 1st April 2012 to 6th January 2014.
  4. This year the Citizens Advice service celebrates its 75th anniversary. We’ve planned a year of activity running from January to December 2014. Contact the press office on 03000 231 080, or via email at, to find out more.
  5. 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.
  6. 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.
  7. To find your local bureau in England and Wales, visit You can also get advice online at
  8. 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
  9. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 6.6 million problems from April 2012 to March 2013. For full 2012/2013 service statistics see our quarterly publication Advice trends
  10. Citizens Advice service staff are supported by more than 22,000 trained volunteers, working at over 3,000 service outlets across England and Wales.