The Children's Society has responded to the Financial Conduct Authority announcement that a pay day lender will pay £2.6 million compensation for threatening customers with legal action from bogus legal firms.
Matthew Reed, Chief Executive of The Children's Society, said:
'Our Debt Trap report was clear that debt causes worry and anxiety for families and children. We found worrying issues with how lenders treat families – 42% of parents struggling with payments on payday loans said they were treated 'badly' or 'very badly' by their lender, more than any other type of loan we asked about.
'Far from being oblivious, children are absolutely aware of the anxiety and stress in their households caused by problem debt - more than half of children in families with problem debt say they worry about their family’s financial situation and half that it causes arguments in the family. Which makes behaviours like this incredibly alarming.
Families under strain
'A lot of families across the country are under financial strain, but families with dependent children face extra pressures as they are more likely to face unexpected bills and are less able to cope with sudden financial shocks like redundancy, reduced hours or illness.
'Many families end up feeling that taking on credit is the only way to make ends meet. But this often marks the beginning of the debt trap.
'What these families need is advice, support and breathing space to put the brakes on a downward cycle of debt, not aggressive behaviour and false legal threats from creditors.'
The Debt Trap: Exposing the Impact of Problem Debt on Children, is available here.
For more information, please call The Children’s Society media team on 020 7841 4422 or email. For out-of-hours enquiries please call 07810 796 508.
Notes to editors
- The Children’s Society wants to create a society where children and young people are valued, respected and happy. We are committed to helping vulnerable and disadvantaged young people, including children in care and young runaways. We give a voice to disabled children, help young refugees to rebuild their lives and provide relief for young carers. Through our campaigns and research, we seek to influence policy and perceptions so that young people have a better chance in life. Someone who acts on their behalf and can help guide them through the extremely complex system. These children deserve to be kept safe so they can recover from the trauma they have suffered and rebuild their lives.