Debt Hacker on Channel 5 - Miranda’s story of Christmas Debt
Debt Hacker founder Alan Campbell was interviewed on Channel 5 News as part of our campaign exposing how payday lenders seek to exploit worst-off at Christmas.
Below is a clip from the interview, or read on for the interview transcript to see how Debt Hacker is helping people win compensation from high cost lenders using our free payday loans complaints tool.
One campaigning group says more than a third of shoppers feel under pressure to spend more than they can actually afford.
Ruth Liptrot has been speaking to one woman who has racked up thousands of pounds of debt after taking out a loan just to buy gifts.
Like many of us Miranda felt pressure to create the perfect Christmas for her little boy. Seven years on she's still paying for it.
“The process of my debts started with an 800 pound payday loan and then a month later it was due and I couldn't pay it. So then I got another loan, and then I got another loan, and then before you know it you're thousands of pounds in debt.”
“I can't sleep at night. I don't like to open the door. I won’t answer the telephone. If I don't know who's coming around, then you know there's no way I'll even go to the front door.”
The payday loan companies are operating completely legally, but campaigners Debt Hacker want the industry to only offer loans people can actually afford to pay back.
But almost a quarter of people in the UK haven't been able to afford to buy any Christmas presents at all.
This charity are collecting toys for 5,000 kids living below the poverty line in Hackney.
“We'd like to reach at least 5,000 children this year, but we desperately need help. We're halfway there, we've got three weeks to go, we really need people's donations.”
“We've never said that we would swoop in like Santa Claus and give these presents ourselves. This is a kind of an anonymous thing if you like, so the presents go to the parents so that they can have the joy of giving - and I think that's really important.”
Whatever your circumstances though give what you can and never what you can't.
“It's such a showing the pressure that's put on all of us at Christmas and at the end of the day you know what kids actually prefer it's playing with the box that the toys come in. You know, it's the pressure we put on ourselves - it's not the pressure the children are putting on us or our families. So it's really unrealistic and it's just it's really sad.”
Claudia-Liza Armah (CLA): no such thing as a perfect Christmas but one that doesn't require us to get into financial difficulty is a pretty good start. I’m sure that’s something many of us can relate to and joining me now is an Alan Campbell from the campaign group Debt Hacker.
I have to say no judgment here for me, when it comes to Christmas you want to make your family happy, you want to make your kids happy, and you want to do that by buying them the best gifts.
Alan Campbell (AC): What we're seeing there is something many many people fall into. This time of year, people are so pressured into buying gifts that they can't afford and a situation that you had there with Miranda was crazy. She had a requirement to give her son a really good Christmas. She thought she was doing the right thing and he went into debt for seven hundred pound. That ballooned up to seven thousand pound were she loaned money to six or seven payday lenders.
What our campaign is about is to say to people, if you've been sold an unaffordable loan then you've got the right to make a complaint. If that complaint is successful - and most complaints are successful - then you get back all of you interest, all of your charges, and you get that loan removed from your credit score..
CLA: Wait a minute, so you get the loan removed from your credit score, and does that mean the loan’s wiped out?
AC: It means if it's a loan which you have repaid you get back all of the interest and all of the charges on the loan that you've repaid.
If it's an unaffordable loan which you’re paying, then you no longer have to pay the interest on that because it only becomes repayable when it is affordable to do so.
You see the thing is that people think that if they struggle and repay a loan by missing bill payments or going without, then that means that the loan was affordable because you managed to repay it. But actually if you struggle to repay a loan, it means the loans were unaffordable and in those circumstances, like Miranda, you've got the opportunity to make a complaint.
Debt Hacker has set up an easy free-to use-online payday loan complaints tool. We’re a not-for profit organisation that encourages people to exercise their right to complain.
CLA: It's the interest rate that can be the real killer here. I mean, why are companies selling loans to people who can't afford it?
AC: Well, companies sell one to people who can't afford it because they work on the basis that most people take the repayment of a loan very responsibly. You think it's a responsible thing to do, to repay it. That's why Miranda get into so much difficulty. What they do is that they profit from what they call the “willing struggler” - people that will go without to repay these loans, when in fact it's the companies that should check whether these loans were affordable. If they don't check and they don't have the evidence that they've checked, then the borrower can get back all of the interest and all of the charges.
CLA: I have to say, Alan, these companies would also say that they are working within the framework of the law, that they're not doing anything wrong.
AC: But that's not correct because we know that Miranda couldn't repay those loans. She was an unemployed mother, living on benefits. She had no other source of income and the loans went from £700 pounds up to £7,000. They are not doing the checks that they were obliged to do under the Financial Conduct Authority.
CLA: Some really good advice there. I hope you might be able to help some people with that advice.
Debt Hacker want a world where people with problem debt get treated fairly and can take back control of their money. Try our payday lenders complaint tool.