Warning to check before resorting to moneylenders
By Mary Dennehy
PEOPLE have been encouraged by a local conference of St Vincent de Paul to always seek assistance and check their options before using moneylenders.
Last week, through a submission to the Department of Finance, St Vincent de Paul (SVP) called for all licensed moneylenders to carry a ‘tobacco-style’ high-cost loans warning on their advertising and literature.
SVP believes that ‘Warning: This is a high-cost loan’ should be on all moneylending advertise-ments and literature, with the warning also pointing out that “alternatives to high-cost loan offerings may be available” and that people should check their options before borrowing.
SVP has also recom-mended a statutory maximum cost of credit which can be charged, which could be achieved through the introduction of a statutory interest rate cap.
According to Caroline Fahey, SVP Head of Social Justice: “This should be done at the same time and in conjunction with the introduction and strengthen-ing of other measures to protect vulnerable custom-ers of moneylenders.”
According to SVP’s submission, there are an estimated 330,000 custom-ers of moneylenders in Ireland, with an average loan size of €566.
Kieran Stafford, SVP National President, said: “SVP members regularly report inappropriate lending to very vulnerable house-holds who do not have the capacity to repay the loan.
“It is our experience that people tend to use moneylenders when they have limited access to other sources of credit and they may be worried about cutting themselves off from this source of credit by reporting abuses within the sector.
“Living on a low income and having a poor credit rating limits the options for people who are trying to access credit.”
He added: “Repaying a high-cost loan is a very heavy burden for households that are strug-gling and can lock them into a cycle of debt and poverty.”
Local con-ferences of SVP have encouraged people to contact the charity if they are experiencing financial difficulties.
Marie Cronin, Vice President of the Bally-fermot, Cherry Orchard, Clondalkin conference, said: “We are encouraging people to come to us first.
“There are certain things we may be able to help with, and we can get people an immediate appointment with MABS (Money Advice and Budgeting Service).
“People don’t realise the interest they are going to have to pay.
“No matter what the problem is ask SVP first and we will see what we can do.
“We would also ask families not to go to money lenders for back-to-school costs, contact SVP.”
According to Central Bank, while moneylenders are required to provide information about the high cost nature of the loan to their customers, this is typically provided in the moneylending agreement signed by the customer.
However, it is not a requirement for the advertisement of licensed moneylending loans.
People are encouraged to contact their local conference of SVP, either through their local church or by calling SVP head office on 8848200.
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