Alarming new figures from Angus Citizens Advice Bureau have revealed the number of people seeking help over the issue of payday loans has more than doubled in the past year.
In the 12-month period to July 1, Angus CAB saw a record 265 inquiries an increase of 125% on the previous year.
The service has now formed a team of three members of staff to focus on the problem of debt in Angus.
Angus CAB project manager Mairi Buchanan said people in the county were still being “lured” to payday lenders as a “quick fix”.
She said: “We have seen a huge increase in the number of people seeking help over debts.
“Every week the Angus Bureau sees at least five new cases of people who are in unmanageable debts to payday lenders.
“Many people in Angus are struggling to find money for basics such as food, fuel and transport to access services.
“Our clients are lured to payday lenders as a quick fix but are not necessarily aware of what they are signing up to.”
Ms Buchanan warned that payday loans may provide a speedy short-term solution but can create a very long-term problem and can increase debt.
She welcomed proposals from the Financial Conduct Authority last month to limit the amount of interest payday lenders can charge to 0.8% a day, alongside a principle that nobody should have to repay double the amount they borrowed.
She added: “The Angus bureau welcomes these recent developments which are a step in the right direction.
“However, more can be done to ensure that payday lenders adhere to best practice.
“Our research has shown that lenders are not cleaning up their own act, so there is no doubt that tighter controls are necessary.”
Angus CAB which has offices at Millgate, Arbroath, Queen Street, Forfar and Castle Street, Montrose can provide debt advice and helps people to consider all options open to them.
For example, a loan from Angus Credit Union can be much more affordable.
Citizens Advice Scotland’s head of policy Susan McPhee recommended that more steps be taken to protect people from the “misery of debt”.
She said: “We’d like to see greater choice in the market, and measures to make sure all lenders are following the guidelines the industry itself has signed up to.
“The high cost of short-term lending causes huge problems for many people and particularly those on lowest incomes who are hit disproportionately by such charges.
“We need to make sure we do everything we can to create a fair lending market which offers choice to consumers, a reasonable profit for responsible lenders and protection for the most vulnerable.”
Last week three payday loan companies had advertisements banned after Citizens Advice complained they were irresponsible and misleading.
Online lender Peachy claimed their rates were “cheaper than payday loans” but the Advertising Standards Authority said it had failed to provide evidence that customers would pay less than other short-term lenders.
The same firm was also criticised for promoting a casual attitude towards loans by putting the phrase “small bites put a smile on your lips” next to a cartoon of a mouth.
A complaint against broker Loan Monarch that it encouraged people who might not be able to make repayments to take out a loan was upheld by the ASA.
A text message sent out by spends4u.co.uk was banned for implying recipients could be approved for a loan regardless of their circumstances and trivialised the lending service.
Help with debts is available from www.adviceguide.org.uk/scotland and Angus CAB offices.