Pay-day lenders were accused of putting poor people ‘in pain’ with high interest charges when bosses faced a Sheffield MP.
Members of the Business, Innovation and Skills parliamentary select committee – including Paul Blomfield, Labour MP for Sheffield Central – put representatives of Wonga, Mr Lender and QuickQuid on the spot.
Henry Raine, of Wonga, said one in 33 customers breach a 60-day limit to repay loans and have to come to special arrangements. But he said: “The majority pay on time. We freeze interest after 60 days and 25 per cent of people pay early.”
Committee members accused lenders of ‘grooming’ the next generation of borrowers with TV adverts.
Mr Blomfield said: “The lenders demonstrated shocking complacency when confronted with the damage they do to lives. When I challenged Wonga on ‘rolling over’ loans borrowers can’t afford to pay back, they said they were responding to demand.”