Justin Welby is a clever man. His comments about payday loan companies in Total Politics have managed to please both the left and right, which is no mean feat on such a controversial issue. How has he managed to do it? Well, the Archbishop has identified a social problem, of people accessing high-cost credit that they can’t always afford to repay, and offered an intelligent solution, rather than that offered by politicians suffering from dosomethingitis, which is normally to ban stuff they don’t like.
Welby clearly doesn’t like payday loan companies. They do charge high rates of APR, but only on short-term loans, which makes Wonga’s 5,853 per cent APR look a lot worse than it is because the loan isn’t taken out for the year. But debt advice charities worry that many of those who take out the loans cannot pay them back: 28 per cent of loans are rolled over beyond their payback date at least once, according to the OFT.
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