A North Wales Assembly Member has today called?for action to alert people to the true cost of pay day loans and ensure they are offered viable alternatives.????

Speaking in today’s Individual Members Assembly??Debate, Mr Isherwood highlighted that the pay day loan market has grown rapidly in recent years and expressed concern that it is too easy for people to access the short term benefits of pay day loans.

He said: "Recent research from The Association of Business Recovery Professionals, showed that of the people they sampled who had taken a payday loan, 60% regret the decision and 48% believe the loan has made their financial situation worse. Only 13% believe their payday loan had a positive impact on their finances."

Mr Isherwood added: "As Consumer Focus state, ‘it would be useful for mainstream financial services firms to consider how they could offer loans for smaller sums of money, and be clearer about the charging structures of their overdrafts.’

"In this context, Banks should also take a far more professional and personalised approach to the cash flow needs of their customers."

Mr Isherwood stressed that the Citizen’s Advice Bureau report a four-fold increase in the number of people with payday loans coming to them for debt advice and a six fold increase in pay day loans as a percentage of all unsecured loan debts.

He said: "Evidence provided by Citizens Advice?suggests that people in long term financial difficultly are more likely to take out a pay day loan to try and deal with their problems - and yet, the pay day industry remains inadequately regulated.

"They have seen financially vulnerable consumers unprotected from a variety of unfair practices carried out by pay day lenders, lost in a system that offers little protection and inadequate access to affordable credit."

Mr Isherwood highlighted the work of Moneyline Cymru and Community Housing Cymru who are collaborating with Citizens Advice and the Wales Housing Debt Helpline to help tenants to access money and debt advice.

"Moneyline Cymru,a social enterprise, part funded by 16 housing associations, provides money, advice and credit to disadvantaged people with thin or negative credit files who are usually denied finance by mainstream outlets like banks or credit unions.

"They report increasing lending volumes and, importantly, almost 100% of new customers opening a savings account."

Mr Isherwood also called on the Welsh Government to maximise the freedoms delivered by changes to the UK Credit Unions Act, which came into force this month.

"Credit unions are now free to extend their reach and work with organisations such as housing providers, community groups, employers, social enterprises and charities to bring financial services to new groups of people," he said.