Payday lenders are "bombarding" debt-ridden families with unsolicited marketing calls pushing them to take out more loans, new research has found.
This comes after a grandfather was driven to take his own life after he racked up over £20,000 of debt to 12 lenders, who sent him hundreds of text messages demanding payment after his death.
The StepChange debt charity found that 32% of the people they surveyed who had contacted their helpline were receiving cold calls from payday lenders, with those targeted getting on average 10 calls per week.
Nearly one in seven (15%) of those cold called by payday lenders went on to take out payday loans, borrowing £980 on average with one or more lenders, sparking fears that the loans would drive them into further financial difficulty.
StepChange chief executive Mike O’Connor said: “These findings show that nuisance marketing calls can be harmful and push financially vulnerable consumers deeper in the downward spiral of unsustainable borrowing.
“For those in financial difficulty, the offer of an easy, no-questions asked loan can seem like a financial lifeline. The reality is that it can be a financial noose around the neck of vulnerable people and their families."
O'Connor called on the Financial Conduct Authority, regulator of the industry, to "ensure that unscrupulous firms can no longer exploit people’s financial troubles in this way.”
Labour MP and payday loan campaigner Stella Creasy said: “It’s behaviour like this that shows these firms have no respect for their customers – once you are on their lists they pursue you ruthlessly to see how much they can squeeze out of you with little regard for whether you agreed to this kind of cold calling.”
The findings come after an inquest heard about grandfather Ian Jordan, 60, from Southampton, Hampshire, who was being charged more than 5,000% in interest by one of the lenders as he borrowed to pay off existing loans.
His daughter, Samantha Carr, said that Mr Jordan received 1,000 texts from the lenders after his death and called for stricter controls on the industry.
She told the Southern Daily Echo: "He was borrowing money to pay off debts (which was) to pay off debts.
"The interest rate is one thing, the fact that you have already got this debt was another. It just spiralled out of control."
"Why do they still lend money to people when you have got debt? My main concern is to make sure that this doesn't happen to anybody else."
Southampton Coroner Grahame Short recorded a verdict of suicide at the inquest which heard that Mr Jordan died after taking an overdose of painkillers.Suggest a correction