Residents struggling with debt are being urged by Derbyshire County Council to turn to credit unions for help instead of high risk borrowing - after a leading payday loan company was ordered to pay compensation for ‘unfair and misleading’ debt collection practices.
The Financial Conduct Authority has ordered Wonga to pay out more than £2.6 million to 45,000 customers after sending them letters from non-existent law firms.
The letters threatened legal action.
Derbyshire County Council Leader Councillor Anne Western said: “When people are struggling to make ends meet any offer of money to get them through the week can be tempting.
“But these quick financial fixes can come at an extremely high cost and it is sadly financially vulnerable people who can afford it the least who are preyed on the most.
“We want to help people struggling with debt and low incomes to get back on their feet and credit unions can help them avoid the need to risk high-cost credit.
“Derbyshire’s credit unions do an invaluable job. That’s why we’re supporting them and why I’d urge people struggling with money worries to turn to them first for advice and support.”