Frank Field MP
Your MP for Birkenhead
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Birkenhead’s MP gains action against exploitative doorstep lenders

06 December 2018
Commons Chamber

Birkenhead’s MP Frank Field has gained two immediate moves from the Government to help kick-start a fightback against exploitative doorstep lenders like Provident.

During a House of Commons debate on Wednesday, on the provision of affordable credit for households on low incomes, Frank provided horrific examples of the exploitation and predatory practices that are afflicting vulnerable people in Birkenhead, and elsewhere, in the run-up to Christmas.

Among the examples provided, in the words of families and volunteers, were:

- 'There is so much pressure to take the loan out to begin with. I filled in a form on a website, and they were calling me up to 8 times a day until I took a loan out. I realised dead quick that I couldn't afford repayments and had to sell the kids’ toys, my clothes, and all sorts because they were pressuring me to pay it back. We went without food so I could pay the money back. The money was meant to help me buy food not leave me without any.'

- 'I borrowed £100 from Provident and ended up having to pay back £499.20. When you take it out they tell you all the info, but in code. If you don't know what representative APR is you get totally screwed over and taken advantage of. I didn't sleep for weeks, when I did, I'd wake up in a jolt at any noise because I'd think it was them coming to get the money I didn't have. We both worked, but finances just weren’t stretching with three kids.'

- ‘If you Google ‘Loans Birkenhead’, all the first things that come up are payday-style loans. I've just been having a look online […] and the first options you’re faced with off Google are ones all 'Representative 433.5% APR.'

- ‘Provident came onsite knowing that it was a young persons’ supported accommodation project where vulnerable young people live and got the residents to sign up for a loan of £100 each.’

- ‘Another one of our users has stated that each time they get close to clearing their debt with Provident they are offered another loan before they manage to pay it off. This is combined with the existing loan and results in a never ending cycle of debt and repayment which they are struggling to get out of’.   

Frank highlighted in the debate how some of the websites offering such loans specifically target single parents, unemployed people, those with a bad credit score, and others with disabilities. He also set out how a loan of £300, paid back within three months, would incur 1557.7% APR.

Frank added: ‘Provident is putting out these leaflets in the Wirral, personally addressed, and on the front are pictures of a little girl and the words, “The look on her face”, “Decorating grandad” and “Visiting loved ones”, all playing on the feeling of exclusion that many poor people feel all the time, but especially at Christmas.

‘Behind those leaflets there is a carefully targeted business plan, because certainly Provident stepped up its activities with the beginnings of the roll-out on universal credit. Officers of Provident were knocking on doors with application forms in one hand and fistfuls of money in the other, asking whether people wanted to sign up or needed a loan, knowing that while we still have difficulties with universal credit today, we certainly had mega-difficulties when it was first rolled out in Birkenhead.’

In response, the Treasury Minister John Glen pledged to refer each example to the Financial Conduct Authority for immediate action, and to review the practice in which Google is able to give priority to the most exploitative lenders on its webpage.


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