COMPUTERS in libraries and council buildings will be blocked from accessing so-called ‘payday’ loan websites.
Cheshire West and Chester Council (CWaC) has agreed to introduce the block from October 1, preventing council workers and the public accessing the sites.
Cllr Adrian Walmsley, who represents Newton, and Cllr Neil Sullivan, who represents Handbridge Park, tabled a notice of motion calling for the block.
Cllr Walmsley was concerned over “irresponsible lending and aggressive tactics” used in the ‘payday’ loan industry.
Executive councillors and scrutiny committee members supported the proposed ban. The block applies to both computers available to the public and those used by the council’s 5,000-plus employees.
Cllr Walmsley said that one of the main criticisms in a highly critical report by the Office of Fair Trading was that lenders failed to carry out the basic checks on whether borrowers can afford the loans.
“Statistics show that up to a third of loans are either repaid late or not repaid at all and that 28 per cent of all loans are ‘rolled over’ and refinanced,” he said.
“The practice of rolling over loans can all too easily lead to people becoming trapped in a spiral of increasing debt.”
Some councillors had argued the block would create a ‘nanny state’ and limit personal choice but members were asked to investigate the issues and recommended the block should be introduced.
Cllr Eveleigh Moore Dutton, chairman of the corporate scrutiny committee, said: “The interest rates charged by the industry beggars belief – they are in the thousands of per cent – and they tend to target those least appropriate for lending.
“There is an old saying that ‘if you can’t afford to save, you can’t afford to borrow’ but they seem to be prepared to squeeze people beyond that.”
Earlier this year, the Citizens Advice Bureau reported that three-in-four payday borrowers who contacted them for advice had been treated unfairly by their lender and could have grounds for complaint to the Financial Ombudsman.
Councillors also agreed the council should promote the benefits of using credit unions to help eliminate the use of loan sharks and payday loan companies.
Council IT workers are also to investigate the possibility of having all attempts to access ‘payday’ loans sites automatically redirected to websites giving advice on credit unions.