Payday Loan Provider Invites Industry Critics to See How a Responsible Lender Operates

HERTFORDSHIRE, ENGLAND, August 19, 2010 (Press-News.org) In a statement issued today, loans industry expert Gary Miller-Cheevers (and CEO of payday loan company speed-e-loans.com) has responded to the recent furore over payday loans following research from watchdog Consumer Focus. He agrees that while responsible lending is key to stopping people getting in to a debt trap, industry commentators should remember that the so-called "obscene"* APRs quoted by payday loan companies should be taken in context.

The Consumer Focus research revealed that the amount of people taking payday loans has quadrupled in four years, with some 1.2 million people now taking out a payday loan every year, borrowing a total of GBP1.2bn.

The organisation estimates that the average borrower takes 3.5 loans a year to tide them over and worry that repeat borrowing at so-called "eye watering"** interest rates can leave consumers who postpone payments, or take out repeat loans, caught in a debt trap.

Mr. Miller-Cheevers says the issues highlighted by Consumer Focus do not necessarily reflect customers of every payday loan company saying that, through responsible lending, the amount of his customers who extend their loan for a further pay period is not substantial. "Most of our customers like to think of us a place they can come as and when an emergency occurs, as everyone knows that you can't rely on your bank to help out anymore."

He says that his company achieves this low debt-ratio through responsible lending: "We reject approximately 90% of applications and initially limit borrowing to GBP250. If applicants have unmanageable debts, we do them a favour by turning them away.

"We also restrict repeat borrowing."

Addressing APRs, Mr. Miller-Cheevers said: "There seems to be a fascination with industry commentators banging on about high APRs but the real picture is that an annual calculation of interest, like APR, doesn't really deliver a meaningful way of illustrating the cost of a payday loan that could be for as little as 7 days.

"Our payday loans can be a cost-effective short-term fix for people who genuinely have an issue and will get paid at the end of the month, often working out cheaper than getting an unauthorised bank overdraft."

He summarised: "With MP Stewart Hosie branding APR payday loan rates as "obscene" and Consumer Focus branding them as "eye-watering", I would welcome the opportunity to invite both Mr. Hosie and members from Consumer Focus to come and see how a responsible payday loan company operates".

*Quote from Dundee East MP and SNP Treasury spokesman Stewart Hosie

**Quote from Consumer Focus's financial services specialist Marie Burton

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speed-e-loans.com is a practical alternative to banks that can no longer help their customers with their short term financial needs. Privately backed by people who understand our customers, our mission is to provide instant decisions and two hour money whenever they need it. We are at the cutting edge of modern consumer finance by offering small, short term loans online with real speed and ease. We are flexible and paper free which means you can apply using our easy-to-use website whenever you need cash in a hurry. We also offer a prepaid MasterCard that can be loaded with your payday loan. We have a consumer credit licence from the Office of Fair Trading.

Website: http://www.speed-e-loans.com