Lancashire's credit union offers advice as doorstep lender stops its loans service

The credit union which helps people from Blackpool to Preston has welcomed the ending of a doorstep lending operation.

Tuesday, 18th May 2021, 4:55 am

The news that Provident Financial is to close down its doorstep lending operation has pleased the credit union community.

The company had been the subject of compensation claims over recent years, on behalf of customers who claimed to have been "mis-sold" loans.

Provident said it will now withdraw from doorstep lending which it had been doing since the 1880s and, at last count, had about 311,000 customers, in favour of its credit card and unsecured personal loan division Vanquis Bank.

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Anthony Brookes and Jackie Colebourne of Clevr Money, the Lancashire Credit Union
Anthony Brookes and Jackie Colebourne of Clevr Money, the Lancashire Credit Union

The doorstep lending model, while legal and regulated, had been criticised by campaigners and credit unions such as Clevr Money, which has offices in Blackpool and Preston, for the high interest rates and the ease with which people could get into significant debt.

Clevr Money said it had experience of helping former Provident customers. Many originally took out quite small loans and made their repayments weekly in cash.

But the informal method meant some people didn’t really understand how much they were paying back in total, and it could take years for them to realise the financial mess they were in.

Not for profit group Clevr Money said the change could leave many thousands of people, who who don’t have access to alternative credit such as those without current accounts, in limbo and at risk of racking up even more debt with online Payday lenders or even turning to the thoroughly unscrupulous illegal loan sharks.

Anthony Brookes, Clevr Money loans manager said: "While the ideal is for people not to get into any debt, the reality is they have as much need for cash as anyone else, to pay bills, rents, buy food and clothe their children.

"There will be families who have been using the same doorstep lender for generations, who have a great relationship with their contact and rely on the service. We are desperately hoping that those people will turn to the credit union for help rather than another high-interest lender.

"We lend responsibly, and our aim is to help people pay off their debts and sort out their finances, not to remain in debt forever. We offer loans specifically to pay off large debts, and arrange affordable repayment plans.

"We provide specific loans to help with buying school uniforms or paying for car repairs or replacement white goods for example."

He said their loans in Lancashire tended to range from £200 to help with things like Christmas and birthdays, to large loans up to £15,000 to pay off many years’ worth of debt.

See also: Lancashire's credit union reports busy year as coronavirus lockdowns take their tollBlackpool Gazette: Thanks for reading. If you value what we do and are able to support us, a digital subscription is just £1 for your first month. Try us today by clicking here