Time to get out of the water

Web stats highlight growing demand for payday loans

For a newly elected MP, Walthamstow MP Stella Creasy can take a bow. The campaign she has led against payday loans has been pretty effective.

The latest, in case you missed it, is that the Office of Fair Trading (OFT) is to investigate 50 UK payday lenders amid concerns that some firms are taking advantage of vulnerable consumers.

The scale and continuing growth of the payday loans sector – or as Creasy would call it, the legal loan shark industry – is a worrying sign of the times.

In February, the Coop Bank found that 5 per cent of the British population accumulated debt in 2011 due to payday loans.

That figure is already out of date.

A report recently released by Greenlight, the leading independent digital marketing agency, provides further evidence of the growing size of the payday loan industry.

In January, UK consumers made a total of 2.5m online searches for retail banking-related products.

Loans accounted for the majority (37 per cent) of searches (934,234) with the keywords ‘Loans’, ‘Payday loans’ and ‘Student loans’ being the top three terms consumers used to conduct their searches.

Specfically, the search term ‘payday loans’ accounted for 165,000 or 7 per cent of all retail banking searches in January.

By contrast, searches for the terms ‘credit cards’ and ‘mortgages’ each scored a mere 4 per cent of all searches.

So, just to labour the point, almost as many searches were conducted for payday loans as for searches for credit cards and mortgages, combined.

The Greenlight research also flags up conclusively just how aggressive and digital-savvy the payday loans sector has become.

MoneySupermarket.com is the most visible online retail banking-related online advertiser, achieving a 71 per cent share of voice through bidding on 25 keywords, at an average ad position of four. That finding comes as no surprise and is not exactly a cause for concern.

And the second most visible online banking advertiser? Step forward Wonga, with a 33 per cent share of visibility through bidding on four keywords.

Its payday rival QuickQuid displayed the most visible ad creatives of any advertiser (equal with Tesco Bank) while the top 10 also featured ww.minicredit.co.uk and www.paydayuk.co.uk.

If you think that it is bad in the UK, it is arguably worse in the US.

In the US, the numbers are staggering with an estimated 12m Americans annually caught in long-term debt from payday loans, according to non-profit research and policy organisation, the Centre for Responsible Lending. In contrast to the position in the UK, a number of leading US retail banks have jumped onto the bandwagon and are offering a range of payday loan products.

Wells Fargo, Regions Financial, US Bank and Fifth Third are just some of the largest US retail banks to offer payday loans.

It will be a brave –or rather foolish - UK retail bank which looks to follow their lead with such a product launch.

Meantime, pending the OFT investigation being concluded, one would hope that the payday loans sector might have the commercial and political savvy to clean up their act.

They could, for example, take steps to ensure that customers are not trapped into a cycle of debt by ending the rolling over of payday loans; they could consider the radical step of self-regulation by getting by on less than the APRs of, say the 4,214 per cent charged by www.wonga.com

Then again, pigs might fly.

The chances are that this is one area of retail banking where we might witness something approaching a consensus: that it is an area overdue for regulation.

That would be a right result for the new girl in the House from Walthamstow.

Douglas Blakey is the editor of Retail Banker International

Photograph: Getty Images

Douglas Blakey is the editor of Retail Banker International

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Manchester attack: Theresa May condemns "warped and twisted" terrorist

The Prime Minister said the police were treating the explosion at the Manchester Arena as "an appalling terrorist attack".

At least 22 people are dead and around 59 have been injured, including children, after an explosion at a concert arena in Manchester that is being treated as a terrorist attack.

Police believe the attack was carried out by a single suicide bomber, who also died. However, the police have also announced the arrest of a 23-year-old man in South Manchester in connection with the attack.

Speaking before the announcement, chief constable Ian Hopkins said: "We have been treating this as a terrorist attack." The attacker was named by papers late on Tuesday as Salman Abedi, a British man of Libyan heritage. The source for this is US, rather than British, intelligence.

The victims were young concertgoers and their parents. Victims include the 18 year old Georgina Callander and the eight year old Saffie Rose Roussos.

The Prime Minister Theresa May earlier said that the country's "thoughts and prayers" were with those affected by the attack. 

She said: "It is now beyond doubt that the people of Manchester and of this country have fallen victim to a callous terrorist attack, an attack that targeted some of the youngest people in our society with cold calculation.

"This was among the worst terrorist incidents we have ever experienced in the United Kingdom, and although it is not the first time Manchester has suffered in this way, it is the worst attack the city has experienced and the worst ever to hit the north of England."

The blast occurred as an Ariana Grande concert was finishing at Manchester Arena on Monday night. According to May, the terrorist deliberately detonated his device as fans were leaving "to cause maximum carnage". 

May said the country will struggle to understand the "warped and twisted mind" that saw "a room packed with young children" as "an opportunity for carnage". 

"This attack stands out for its appalling, sickening cowardice deliberately targeting innocent and defenceless children," she said. "Young people who should have been enjoying one of the most memorable nights of their lives."

She thanked the emergency services "on behalf of the country" for their "utmost professionalism" and urged anyone with information about the attack to contact the police. 

"The general election campaign has been suspended. I will chair another meeting of Cobra later today."

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Ending her statement, she said: 

"At terrible moments like these it is customary for leaders politicians and others to condemn the perpetrators and declare that the terrorists will not win. But the fact we have been here before and we need to say this again does not make it any less true. For as so often while we experienced the worst of humanity in Manchester last night, we also saw the best.

"The cowardice of the attacker met the bravery of the emergency services and the people of Manchester. The attempt to divide us met countless acts of kindness that brought people together and in the days ahead those must be the things we remember. The images we hold in our minds should not be those of senseless slaughter, but the ordinary men and women who put their own concerns for safety aside and rushed to help."

Emergency services, including hundreds of police, worked overnight to recover the victims and secure the area, while families desperately searched for their children. The dead included children and teenagers. The injured are being treated at eight hospitals in Greater Manchester, and some are in critical condition. 

The so-called Islamic State has claimed responsibility for the attack, although this has not been independently verified, and the organisation has been slow to respond. 

Theresa May chaired a Cobra meeting on Tuesday morning and another in the afternoon. She said police believed they knew the identity of the perpretator, and were working "at speed" to establish whether he was part of a larger network. She met Manchester's chief constable, the Manchester Mayor Andy Burnham, and members of the emergency services. A flat in a Manchester suburb has been raided. 

There were reports overnight of strangers offering their homes to concertgoers, and taxis taking people away from the scene of the explosion for free.

As the news broke, Grande, who had left the stage moments before the attack, tweeted that she felt "broken". 

Manchester's newly elected metro mayor, Andy Burnham, called the explosion "an evil act" and said: "After our darkest of nights Manchester is waking up to the most difficult of dawns."

He thanked the emergency services and the people of Manchester, and said "it will be business as usual as far as possible in our great city". 

Extra police, including armed officers, have been deployed on the streets of the city, and the area around the Manchester Arena remains cordoned off. Victoria Station is closed. 

The main political parties suspended campaigning for the general election for at least 24 hours after the news broke. Labour leader Jeremy Corbyn said: “I am horrified by the horrendous events in Manchester last night. My thoughts are with families and friends of those who have died and been injured.

“Today the whole country will grieve for the people who have lost their lives."

Scotland’s First Minister Nicola Sturgeon said: “My thoughts are with the victims, their families and all those who have been affected by this barbaric attack in Manchester."

Sadiq Khan, the Mayor of London, a city which suffered a terrorist attack two months ago, tweeted that: "London stands with Manchester."

The attack happened while many Brits were sleeping, but international leaders have already been offering their condolences. Justin Trudeau, the Prime Minister of Canada, tweeted that: "Canadians are shocked by the news of the horrific attack in Manchester." The Parliament of Australia paused for a minute's silence in remembrance of the dead. 

 

 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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