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Reform Magazine | June 14, 2024

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Niall Cooper: The curse of usury - Reform Magazine

Niall Cooper: The curse of usury

The dangers of being trapped by debt

niall_cooperDebt is now big business – and everyone is affected by it. Debt damages many people’s lives; all the more so if you are already struggling on a low income.

Take Donna, a mum of five and member of our local partner organisation, Thrive, in Stockton on Tees: “Everyone I know has doorstep lenders – family, friends. You don’t have the money to save when you’ve got children or you’re on benefits, so you go to these places. But then you’re paying £1,000 for a second-hand washer. Our fridge-freezer is reconditioned, but it will still cost us just under a grand. I had bailiffs coming to the door, and red letters all the time. I was scared to answer the phone. I was getting depressed. … I was frightened. You’d get loan sharks in my neighbourhood coming to your door. You fall into it. They seem to target Christmas time, when they know people struggle. So you’re going to take that money just to give your kids a good Christmas.”

There has been an explosion in the market for payday loans in the last five years, since the credit crunch started to take its toll in the UK. However, the problem of extortionate money lending has been around for a long time. Loan sharks have been operating in the UK for decades, preying on the most vulnerable people and perpetuating the cycle of poverty.

When I first started campaigning on what is euphemistically called “high cost credit”, the bad boys on the block were doorstep lenders charging interest rates in excess of 170% APR. But more than one million people every month now take out “payday loans” – short term loans typically in the region of £2-300 – at interest rates of up to a shocking 5,500% APR. Payday lenders are not only growing rapidly, but are also hugely profitable. In September, Wonga, the market leader, reported pre-tax profits of £84.5m for 2012, an increase of over a third on the previous year. …

Niall Cooper is director of Church Action on Poverty; for information about its initiative to tackle payday lenders, visit


This is an extract from the November 2013 edition of  Reform.

Read more articles by Niall Cooper

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