Council chiefs are stepping up their war against payday loan companies by making it harder for people to sign up.
People wanting to use computers in Newcastle City Council’s libraries and customer service points will be unable to access websites boasting quick loans with high interest rates.
Instead users will be redirected to local credit unions, which council leader Nick Forbes says “offer people a much lower rate of interest.” Announcing the online restriction, which will also be rolled out to computers in council buildings, rhe council leader added: “We are in the process of restricting people accessing the internet on our public computers in libraries so they cannot access payday lender websites.
“They will be redirected to a credit union which is a better option for people wanting to borrow money.
“Often people don’t go to credit unions as they don’t have the huge advertising budgets.
“Last year 22,000 people in living in Newcastle accessed the debt advice service we provide or help fund and we have seen a 400% increase in the number of people using emergency debt advice services in the past three years.
“This tells me there is a real problem with debt in the city.”
The authority says it is also in ongoing talks with the firms responsible for advertising at the council-owned bus shelters and the hundreds of billboards across the city.
If Coun Forbes gets his way, there would also be a ban on online short-term loan companies promoting themselves in print around the city.
He added: “We are exploring how we as a council can restrict advertising of these payday lenders. We are in active discussions to do whatever we can to help restrict this advertising.
“What I would like to see is the voluntary agreement from the companies not to accept this advertising. We are exploring all of the lines.
“We have to take action against payday lending companies because of the damage that can be caused to vulnerable people who can get themselves into debt very quickly. As a council we have to deal with the consequences of this and it is far better to help prevent people getting into these situations.”
Coun Forbes has been outspoken in his criticism of payday loans since Newcastle United signed up Wonga as its shirt sponsors.
A spokesman for Dollar Financial UK, responsible for high street store The Money Shop and online businesses Payday UK and Payday Express, said: “This seems to be something of a trend which misunderstands a few things.
“Firstly, that people accessing payday loans only have access to the internet via public computers, which they don’t. People have a million and one ways of getting online and The Money Shop, for instance, is a high street store.
“Secondly, the practice of payday lending is entirely legal and under strict regulation.”