By Lynn Malone
Payday loans reared their ugly head in the news this week again. It was widely reported in the media that one million people in the UK had taken a payday loan to fund their housing costs.
Citizens Advice Scotland (CAS) reported that that bureaus across Scotland see over 100 victims of payday loans each week. And on Thursday the Scottish government announced plans to convene a summit to look at halting the growth of payday lenders on the high street.
It all kicked off with the homeless charity, Shelter, warning that one in five people borrowed money to pay their rent or mortgage in 2013. The topic was so hot it was even given exposure in The Voice of Russia. But are we taking our eye off the ball by focusing on the new bad boy in town? Money expert, Gavin Dempster, thinks so.
Although the Money Advice Support Worker at Greater Pollok Citizens Advice Bureau (CAB) in Glasgow welcomes the spotlight falling on the ruthless lenders, he feels more should be done to look at the cause.
He said: "People spend a lot of their time worrying about payday lenders and It almost lets the rest of them off the hook. So the finance companies and the credit card companies are almost given a cloak of respectability.
"Well the fact is, yes they're bad but the rest are also bad. Just because they don't charge the same interest as payday lenders doesn't mean they're not irresponsible lenders.
"Payday lenders are the new whipping boy in town and more has to be done to highlight that the cost of borrowing from other outlets is also a huge concern.
"My concern is that we are taking our eye off the ball with these ongoing problems. De facto what we are saying is that the rest of them are alright. If you're a main stream lender then you're ok, the banks and all the others. If everyone's attacking the likes of Wonga then people think the others must be alright," he said.
The UK Government dismissed Shelter's claims that 19 per cent of home owners are forced to borrow from credit cards, payday loans or friends and family in order to pay their rent or mortgage.
Housing minister Kris Hopkins said Shelter's figures were "based on a small number of calls to their helpline."
Mr Dempster says more has to be done to look at the cause of people having to access payday loans and other credit. Chancellor, George Osborne, has singled out housing benefit for the under-25s as the first target for cuts.
It comes as no surprise then the CAB worker blames poverty pay, a lack of choice and UK welfare reform as the real culprits, saying: "It's all very well the government and people saying we're going to crack down on these payday loans but what's the cause? We're not focusing on the cause, we're not focusing on people being sanctioned and people have no money, people have no cash coming in.
"Many people have very low incomes, now they're going to stop people getting housing benefit because they're under 25. So they'll have no money to pay their rent. They are being forced to go to doorstep lenders and payday loans. They have no choice but to go to them," he said.
SNP MSP Bob Doris, who is a member of the Cross-Party Group on Housing, agrees that UK welfare reform is having a significant impact on people's lives, saying: "Westminster's welfare reforms are having a devastating impact on people's lives and it is deeply disturbing to hear home owners are having to borrow from credit cards, payday loans or friends and family in order to pay their mortgage.
"While the cost of borrowing from credit cards is of course a huge concern, payday lenders cause major human suffering as a result of their unscrupulous practices which profoundly affects some of our most deprived communities.
"I have become increasingly worried that payday loan companies are becoming an accepted part of our high streets, so I'm delighted that the Scottish government has agreed to convene a summit to tackle the problem.
"But we cannot forget that a major factor in people having to turn to these places for money is a direct result of Westminster austerity and brutal welfare reforms.
"While the Scottish government's commitment to tackle payday loans and mitigate the impact of welfare reforms, it is unfortunately true that the powers over both areas currently sit with Westminster.
"Only a Yes vote will give Scotland the full powers of independence to fully stamp out the abuses of payday lending from our society and enable us to create a fairer welfare system."
All people want in life is a fair deal.