Tuesday, 26 June 2012

Son Died from Payday Loans

I read this in the Sun and felt it required read by all.

THE devastated parents of a teenager who committed suicide have said the 18-year-old took his life because of the spiralling debts he owed payday loan companies.

Now Geoff and Dawn Scott are calling for a cap on sky-high interest rates charged by lenders such as Wonga.
Bright IT apprentice Oliver — known as Ollie to his mates — committed suicide in September, seven months after admitting to his family he had become addicted to gambling at bingo halls.
To fund his habit, Ollie used his smartphone to access a series of quick-fix loans — some with interest as high as 4,214 per cent — with the money in his account in less than 30 minutes.
His mum Dawn said: “I think you’re not mature enough at 18 to borrow. Kids with computers and iPhones can just touch a button. It’s not real.
“When I wanted a loan for a car when I was starting off I went and saw a bank manager.”
Ollie — who was a popular and exceptionally clever lad, passing at least 14 GCSEs — took loans out with payday loan providers Wonga, Cash Genie and Toothfairy Finance.
But tragically the repayments became too much and he was killed after being hit by a train.
Interest accumulated so fast that Geoff and Dawn, of North Stifford, Essex, still don’t know the true extent of Ollie’s debt, although Geoff paid off almost £4,000 while his son was alive and demands totalling more than £2,500 have arrived since his death.
Payday lenders offer anything up to £1,000 a time without the need for a full credit check. The recession has led to a boom in the sector as Brits struggle to meet day-to-day living costs.
Geoff, who works as a chauffeur in London, said: “I could not believe someone with his intelligence would do this.
“Oliver was not an idiot. This is someone who could explain everything about APR and interest rates to you.
“All he used to say to me was: ‘It’s just like pressing a button. It’s not real money.’ When you fall into that trap there is no way out.”
After Oliver’s tragic death letters addressed to him arrived from different payday lenders and debt collection agencies. They included a bill from Toothfairy Finance, dated September 17, totalling £866, and a demand from Cash Genie for £125.
Geoff had to then fax a copy of the coroner’s statement to these companies.
The couple, who have two younger children, believe Ollie’s death highlights the dangers that these loan companies pose to a computer-savvy generation where cash is just a touch-screen away. Both believe the Government should insist on capping interest rates.
Geoff said: “The Bank of England base rate is just 0.5 per cent, a mortgage could be up to five per cent and a credit card 19 per cent.
“So how did someone come up with 4,200 per cent and authorities agree it legally? That’s what I’m annoyed at.”
Childminder Dawn added: “Ollie was on a computer from an early age. He found it so easy and was very intelligent. The kids of today, it’s not real to them.”
Last week we reported that Wonga have been told to clean up their act after being slammed by the Office of Fair Trading for harassing borrowers.
When asked about Ollie’s death, Wonga said: “We were greatly saddened to hear of Oliver’s passing and our hearts go out to his family.
“We don’t know the full circumstances surrounding this tragedy, but we can confirm he was a customer and that all loans were settled.
“The last loan repayment has since been refunded and we closed the account as soon as we were made aware of the situation.”
Peter Tuvey, managing director of Cash Genie, said: “Cash Genie adheres to a lending policy which includes strict lending criteria such as detailed credit reference checks and financial assessments. We also have a dedicated financial solutions team should any client fall into financial difficulty.”


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