Long Offered Wonga Loan After False Credit Claim

East Belfast Alliance MP Naomi Long has called for tougher regulation of payday loans companies, following the revelation that she had recently received a letter from such a company alluding to a previous credit application she made with them that had, in fact, not occurred.

Mrs Long told the House of Commons yesterday that the company, which UTV has reported as being Wonga, had contacted her in relation to a request for a loan she had allegedly made.

She then she wrote to the CEO of the company seeking an explanation, yet none was provided.

The MP later tweeted the letter to see if others had received similar correspondence. It has now transpired that "her details were obtained when a fraudulent application was made in her name, details which were then used in a marketing trial, breaching data protection," the Alliance Party said.

Mrs Long said it proved again that further regulation of the industry was needed.

"Debt is a growing problem for many of my constituents," she said.

"In the current financial climate and with changing employment patterns and welfare reform, people are finding it harder to make ends meet. Payday loans offer the illusion of quick and easy credit, but it can be at significant cost in the long-term. Unmanageable debt has a corrosive effect on people's lives, including on people's physical and mental health.

"Regulation of the sector is key to prevent people taking multiple loans, to check affordability before lending, to introduce caps on total cost of loans and on default charges, to deal with aggressive marketing in the sector and the management of people's personal information.

"In the case of the unsolicited letter which I received, whilst the company have provided an explanation of sorts, it simply raises more questions as to how they handle personal data. I was never informed of any attempted fraud, nor I have never been advised of any criminal investigation into this attempted identity crime. Further, details obtained in this way should never have been used in a marketing trial."

Mrs Long said that during the Commons debate it was revealed that another MP had experience a similar situation.

"In my constituency, we fortunately have several excellent services such as local Credit Unions, the Christians Against Poverty charity and the StepChange free debt advice group, but this is not necessarily the case everywhere," she continued.

"What we need to do is deal with the underlying issues of poverty, which gets people into these situations in the first place, and also invest in economic education that will ensure people understand the consequences of taking such loans and, preferably, allow people to manage their money better to avoid having to rely on payday loan companies at all."

(IT/MH)