Young, British and Broke: The Truth about Payday Loans

In a Britain that's broke they seem the perfect solution...

Who's going to say no to getting cash in your hand?

Millions of people have taken out a payday loan.

Whether they're struggling to survive...

..or just want a good night out.

How many payday loans have you had?

-15 to 20.

-Wow.

My mum says to me, like, I'm the best-living student in the world.

But have payday loans made it too easy to get hold of money?

If I see clothes that I want and I don't get paid for two days,

I won't wait. I'll want them straightaway.

Now the Government's cracking down on an industry

accused of charging sky-high interest rates

and causing spiralling debt.

I felt like ending it, it was so bad.

And it was because of all the debt.

I'm going to start crying.

I'm Miquita Oliver,

and I know what it's like to have debt hanging over you.

For ten years I was the face of music television,

but recently I'm known for something completely different.

If you Google my name, Miquita Oliver,

first thing that comes up, "Twitter," and then "bankrupt".

At 17 I was earning money I didn't know how to handle,

and before I knew it, I owed thousands to the taxman.

I just felt like I couldn't breathe and that I was sinking.

I was so scared about my future, and I didn't tell anyone for two years.

I want to find out the real truth behind the multimillion pound

payday loan industry.

To do it, I'll open my own payday loan shop...

So it's an interest rate of 3605.35%

Will you just sit down and have a talk

about why you came in today for the loan?

To get some COKE?!

..and go undercover to find out how many companies stick to the rules.

None of your business?

I'll meet people who love them...

That's how easy it is to do.

..worked for them...

The idea that I was earning money from this, it was horrible.

..and people who will never forgive them.

Me mate rang me and he said...

He just said, "Kenny's killed himself."

Among the empty stores and big name closures on Britain's high streets,

one type of business is booming.

Shops offering payday loans are everywhere,

creating an industry worth more than £2 billion.

This street in Rochdale has six of them, and at one time had nine.

Josh has been using them to get cash ever since he was old enough.

Usually you look forward to 18, you're free, you can go out

and get served.

It's not like, "You can get a payday loan now."

That many people are doing it now it's like a fashion, if you will.

20-year-old Josh is young, British and broke,

and payday loans have seemed the answer.

All I honestly see is that "£1,000 in your hand",

I don't see this "1.99% per month."

-What the

-BLEEP

-is an APR to an 18-year-old?

In the two years he's been taking them out,

he's got to know this high street well.

I've had about eight or nine payday loans all together.

I've had hundreds and hundreds of pounds off them.

I've had one from there, one from there,

I've had one from there, and I've had one from down at the bottom.

The cheque centre, there, as well, I got one off them.

Everywhere on this street, basically, I've had one from.

Getting a loan, it's... The feeling's good, obviously,

you've got money in your pocket, and who's going to say no to that?

Who's going to say no to getting cash in your hand?

You just think dollar signs, do you know what I mean?

Get 100 quid, go out on a weekend,

nice little bit of pocket money.

Josh is unemployed,

but he knows all the tricks to make sure that doesn't stop him

getting as many payday loans as possible.

When you go in they ask for a bank statement,

obviously they look for these regular payments,

you get your mates to put in money through BACS or whatever.

Give them a bit of the money for going through the trouble.

If they ring, you just give them your mate's number,

obviously your mates answer, pretend that he's your boss or whatever

and put in false information.

Simple things like putting your name in capitals, the address,

you can put... Blag the address, empty addresses.

But if they had a mind about them, obviously, looking at me,

I weren't going to pay it back.

'Josh has been out of work for two years,

'and with Rochdale hit hard by the economic downturn...'

Hi! You all right? I'm Miquita.

'..he says his friends are in the same boat'

Would you say that quite a high majority of people here

under 25 probably had a payday loan?

-Yeah, yeah I'd say about 80, 85%.

-85%?!

Yeah, definitely, easy. Even my mum's had one, it's just normal.

The way things are these days, it's just the easiest way out.

This part of England is classed as poverty,

the worst for benefits. Everyone's basically messed up round here.

It is a bad place.

But Rochdale's no different to other parts of the country,

where youth unemployment has rocketed

and young people are struggling with money or to find work.

So the quick fix of a payday loan can be easy to get

and hard to resist.

Josh didn't think about the downsides,

but after years of borrowing he's up to his neck in debt.

Now I owe six, seven grand.

Probably 20% that I borrowed and there were 80% interest.

-So it's like just over a grand that you borrowed?

-Yeah.

And now it's six grand to pay back?

I mean, that just feels completely unrealistic.

Exactly. How do you expect a 20-year-old to pay that amount of money back?

And it's going to take over 11 to 12 years for me

to pay off all these loans.

12 years?!

That's what they've estimated it at.

Josh, what responsibility do you take?

If I could turn back time I would never, ever, ever

step foot in a payday... I wouldn't go online for a payday loan,

I wouldn't do anything like that again.

-Just feels like a huge, huge mistake?

-Yeah.

It's a regret that I'll live with now for the next 12 year.

Though I've never been in the same situation as Josh, I do understand

exactly what it's like to have serious money problems.

When I was declared bankrupt it felt like I was in a financial mess

I would never get out of.

The circumstances were different, but I totally get that it

isn't always easy managing your money.

When you're desperate and can't see anywhere to turn,

payday loans can seem the perfect solution.

Two million people are said to use them in the UK, borrowing

from hundreds of different lenders on the high street and online,

thanks to TV ads that make everything seem so simple.

You tell us how much you want, how long you want it for,

and we tell you how much it's going to cost.

Payday loans are supposed to be a quick way of borrowing

a small amount to tide you over until your next payday.

But everyone from the Government to the Archbishop of Canterbury

has taken a pop at them, saying they're not always lent responsibly

or to people who can afford to pay them back on time.

Instead, it's usually the speed of getting a loan

that the companies focus on.

It's easy money, in your hands as fast as you want it -

very attractive if your money's not stretching as far as it used to.

And that's a message some lenders have used familiar faces to get across.

We've all had money troubles at some point - I know I have -

but is there an easier way to get a loan?

Check out cashlady.co.uk. With Cash Lady it's simple to apply...

I actually have a real soft spot for Kerry Katona.

I think when I went bankrupt I sort of did a mental list of people in

my head that had also gone bankrupt, and she came into my head.

I sort of felt like a weird bond with her through it,

but why would she or I be people to ever talk to

about looking after your money? Like, it just doesn't make any sense.

This is a person that has been, obviously, very irresponsible

with their money and they've chosen her as the face of,

"Hey, this is where you should come to get money."

This Cash Lady ad was banned after complaints it encouraged

young people with financial problems to see payday loans as the way out.

And, soon afterwards, the company dropped Kerry

when she was declared bankrupt a second time.

Other lenders have been forced to change their ads because they

didn't make clear a crucial detail - how much the loan will cost.

Too many bills this month? Do what I did.

Visit quickquid.co.uk/tv and get the money you need today.

I would not have got how much the loan was going to cost me

from that advert.

Where on earth in the whole thing, apart from this tiny, tiny

APR, which is literally about this big,

which no-one really understands anyway?

And you can see why it's not something they want to shout about,

because the interest rate charged - the APR - can typically be

anything between 1,000% and a staggering 5,853%,

compared to around 20% you'd usually pay on a credit card.

With big numbers like that, what I can't get my head round is

why it doesn't seem to be putting people off.

In fact, despite all the criticism,

as a nation, we can't seem to get enough of them.

Some people take out loan after loan

to finance a lifestyle they can't afford.

OK, so will there be people there at half ten?

Right, well, we're coming at half ten, OK?

Orlagh and her friends are at Liverpool University,

but they don't let student poverty get in the way of a good night out.

When we usually go on a bar crawl we would come here,

we'd go to Salt Dogs here, Santa Chupitos and then spend like £60

on shots and stuff, and then the casino.

Casino?! I mean, who's got money for a casino?

My mum says to me, like, I'm the best-living student in the world.

How many payday loans have you had?

15 to 20, that's about one every month, that's sounding like.

Every time, they are about 300, 200.

Have you ever been there when she's gone out to use the phone

and then come back £100 richer?

-Yes, in my flat.

-Yeah, I did it in Laura's flat, it's fine.

She was like, "I'm so skint, I'm so skint.

"It's fine, I've got a Wonga, we're going out."

THEY LAUGH

I think they're great.

Why don't you just not have the night out?

I mean, I know exactly how you feel but why not stay in?

I'm a student now, I can go out when I want, do what I want,

I don't live at home, everyone is single and fun.

I honestly think they help because... Especially when you know you've got

a student loan coming in, you know the exact date you get your money,

you're going to have £1,600 and you need £300, do you know what I mean?

You know you're going to pay it back, it's fine, and it's so easy to do.

I always use the app, it's a slider. So, "Welcome back..."

-Oh, "Welcome back, Orlagh."

-"Welcome back, Orlagh."

-It makes you feel quite, like...

-Yeah.

..cosy, like, "Hey, we missed you!"

So, look, "How much cash do you want?

"We can send you £200 within five minutes of approval."

Let's try £200.

So if I go for 21 days I pay back £250.

So £50 quid interest.

To get £200 for three weeks, £50 interest is not that much.

Oh, because I'm a good customer, my money is there quicker.

So If I wanted that right now, we could go back inside

-and I could go to the cash machine and it would be there.

-£200.

£200, just like that.

I think that, if you need one, it's a good reason, why not?

I don't think I could ever see it as a positive thing, ever,

but I do...I do kind of understand what she means by

if you want to have a nice night out and there is a way to have a

bit more money and there is an app on your phone?

I mean, I probably... I'd probably use it.

Orlagh's app gets her money from the best known name

in the payday business, Wonga.

The company sponsors football clubs, TV shows, they're on Facebook.

There's rarely a day goes by when I don't see their logo.

And last year, from lending online, their profits rocketed to

£84.5 million.

That's a LOT of Wonga.

And one person that's still paying some of that is Ste.

-I'm Miquita.

-Hi, I'm Ste.

-Nice to meet you.

His attitude's always been, "Why go without when you can get cash

"and party from the Bank of Payday Loans?"

I think with me, personally, it's

if I want to buy something I want to buy it there and then.

You know, if I see clothes that I want

and I don't get paid for two days, I won't wait.

I'll just go... I want them straightaway.

This isn't money to pay rent,

-this is money to party and buy clothes?

-Yeah.

When you're skint and you go into a clothes shop,

you see about 20 T-shirts and jeans that you want,

and that money is available in ten minutes for you to buy them.

So it lets you live a bit differently,

even if it's just for the evening?

Yeah. If I'm going to the cinema

and I can get a payday loan, I wouldn't just go standard.

I would go premier and get the full package and stuff like that.

It lets you, you know, treat yourself.

But no-one can treat themselves forever,

and Ste's borrowing has now caught up with him.

How much debt are you in now?

About three grand, £3,000.

If I'm honest, you don't seem as worried as I would think

you should be.

I mean, I was terrified every day for about a year.

It's when it's two days before you get paid, you get your wage slip

and you look at how much you're getting

and then you're writing down how much you owe out in payday loans,

and that's when you get that sick feeling.

And then the thing is, because you're nervous and worried,

and you need, like, a cigarette or a drink,

then you're borrowing more to calm yourself down, you know?

Worrying what you're going to do.

Ste's inability to control his spending is his own fault,

but do payday lenders make it too easy for people like him to keep

on borrowing more,

and even take out multiple loans at the same time?

He's got nine of them already, and a history of defaulting.

'But he's convinced he can easily get more.'

Get up to 1,500 quid in four minutes.

'And he's going to show me how.'

This is Cash Lady.

Is that meant to be Kerry Katona?

"Warning, suspicious site."

Even the computer thinks this is a bad idea!

THEY LAUGH

You just click the loan amount that you want. Next payment date.

-You've asked for 50, right?

-Yes.

And now we've told them your information, they're saying,

"You sure you don't want to make it 100?"

So, before you've even got your first loan,

they're already seeing if you want to double it?

-Yeah. See, that's what I mean. That's what they all do.

-Right.

That's all done. Now it's just waiting for an e-mail to confirm it's

been approved and when it's going to be in your bank account.

PHONE BEEPS

"Your money has been processed and your money should be

"in your account today between 3:30 and half 5:30."

-I'm actually quite amazed how easy that was.

-Yeah.

-PHONE:

-"Your loan amount of £50

"will be transferred to your account

"within a few minutes."

'In fact, with no bother at all, Ste's able to get four separate

'loans all against one payday.'

Over the space of about 15 minutes,

we've managed to get, what, 350 quid in your account?

350, yeah.

And without any of them asking

whether you had loans out with anyone else.

No, nothing. That's how easy it is to do.

It feels a bit addictive.

It feels like you could sit here all afternoon, just doing them.

'When it's that simple, I can see how Ste might be tempted to

'borrow first and worry about the consequences later.'

'But if, for Ste, payday loans have become almost an addiction,

'for 23-year-old Lauren Jennings they were a dirty little secret.

'A graduate with dreams of carrying on her studies, she borrowed

'money with huge interest rates, telling no-one

'until it all went wrong and her mum discovered the truth.'

Theresa, when did you realise that Lauren had taken out a payday loan?

Did you even know what that was?

I remember Lauren and I having a conversation about,

"My God, look at the interest rate on that!"

And "How would you be stupid enough to take one of those out?"

-Really?

-Yeah.

At the time, she hadn't already taken one?

I don't actually know,

because the first thing I did know

was that I found a piece of paper...

Cos she's not very good at covering up.

She will leave stuff laying around.

I just confronted her with it immediately,

and she just promised me it was a one-off, she wouldn't be

stupid enough - her words - to go down that track again.

And I believed her.

It turned out that she'd borrowed

£200 in March of last year

and, by May - they've sent us these letters -

were all saying she owed £703.

So, in two months it went up that much?

Well, and when my husband phoned - he had to settle it -

it had gone up again, because of how long it had taken in the post.

It was £1,000, we settled.

And the rate of interest is 27,272% APR.

'27,272% APR is the highest interest rate I've ever heard.

'No wonder Speed Credit -

'one of the companies that Lauren borrowed from -

'is no longer in business.'

I mean, I stood here absolutely shaking with

rage at my daughter, really.

So, so angry.

-Hi, Lauren.

-Hi!

-Hi, Lauren.

Feels weird, cos we've just been talking about you!

Nice to meet you.

I was just saying it was a bit strained, wasn't it?

It was a little bit.

The remnants of payday loans

are still sort of hanging over the house?

Yeah. Oh, yeah.

I don't think I realised the seriousness of it

until my mum found out, then it was like

lump of bricks on my head.

That's what I think.

I don't think you realised that it was ever going to catch up with you.

-The first one that I discovered...

-Yeah, that was the first one.

Yeah, and you promised me

that that would be a one-off

and that you would never do it again.

And you lied.

It's the disappointed, that's the thing that gets you.

When they're disappointed, not angry.

Like, just shout at me.

Your dad paid off that £1,000.

You've not even thought about paying him back that money, so...

I'm not in a position...

Well, I know. But, had that not been your father

and had that been that company,

what would you have done then?

What would you have done, if your parents weren't here

to help you with that first debt?

Become a prostitute.

-No, I'm not going to become a prostitute!

-Good!

SHE LAUGHS

Why do you think you did go get more payday loans

after your parents had bailed you out?

I wasn't thinking. I just...

All it is, is you think

"Oh, I've got money in my bank in half an hour."

People get into trouble with these companies

because it's just too easy. It's too easy to get money.

You can walk off the street and get money off them.

15 minutes and it can be in your bank.

Do you feel like she's learnt her lesson?

Hmmm... Don't know.

Might have to have a conversation with her

later about something else I found today.

I have learnt my lesson, no matter what you think.

I know you will never believe me ever again, whatever I say,

which is really irritating.

But there you go.

'I can understand how mortified Lauren must have been

'when her mum found out what she owed.

'I've never properly spoken to my mum about my debts,

'and maybe it's about time I did.'

-Hi, Mum.

-Hi!

It started to happen...

I sort of knew it was happening, because you got quite

defensive about... If I would be like "What you doing?"

Or even trying to talk to you about it, you got quite, slightly...

Not slightly. Very narky.

So, I worked it out.

What happened is I went bankrupt

but then I didn't tell anyone.

I had a drawer that I hadn't opened

that was just like this of bankruptcy letters.

I remember I took all the letters, put them on that balcony

and just set alight to them.

-Did you?

-Like an actual crazy person.

-Did you?

-I was just like, "This isn't happening at all.

"Just do that." Because I thought I'd gone through it and no-one knew

-and no-one was going to know.

-And you'd be able to...

And I'd just be able to get back on my feet.

Obviously, when it came out in the papers, that's when I was more

upset for Mum, because I felt really bad

that it was like really public.

And I felt like that must have been a really horrible

thing to have your daughter in the papers making such a big mistake.

That wasn't the hardest bit for me. I was just worried about you.

I just want to know you're all right

and just to make sure that it was a situation...

-That I learnt from.

-That you learnt from, exactly.

My mum calls it "The Humbling".

And it was humbling, because it's true,

it drags you down to ground zero

and makes you look at everything.

You have to look at yourself.

'Debt is affecting more young people than ever before.

'It's one reason why it's said under 25s are three times

'more likely to take out a payday loan.

'But I want to find out more about what's making them do it.

'To find out, I've gone back to Rochdale,

'a town with already plenty of payday loan stores.

'But we're opening up another one.'

'We've taken over this empty shop, made it look like we're

'in the business of lending money,

'and rigged it with hidden cameras.'

OK, can you see that cable?

No, can't see that at all.

'We're open for two days and don't really have any loans to offer.

'But we're hoping people looking for some fast cash will

'call in to tell us why,

'so we can see how much they know about what they're getting into.'

'I'm tucked away upstairs out of sight, along with some

'financial experts we've got on hand to give advice.

'And it's not long before our first potential customers come in.'

-Hello.

-You're a new one.

Like all responsible lenders should,

we're going to be upfront about our interest rates.

'Our rate is an average of what you'd pay the best-known lenders.'

'But before anyone gets too keen...' Hi!

'..it's time to come clean... Hi, I'm Miquita.

'..about exactly who we really are.'

I don't want to shock you.

We're not actually a payday loan company.

What do you usually get your loans out for?

My work has reduced all my hours down,

so now I can't afford to get shopping and basic stuff.

I've got two little boys. I constantly worry about money.

There's no other ways. You've got to get payday loans to survive.

It's the easiest way, innit?

But it's not that easy

if the interest rates spiral out of control.

And here's how that can happen.

Take out a loan and pay it back on time and you'll usually only pay

something like an extra £25 interest

on top of every £100 you borrow.

But if you go over the deadline, as up to a third of people do,

that's when those high interest rates can kick in

and what you owe will grow at a frightening speed.

You could end up paying HUGE amounts back.

'I want to test how much our customers really

'understand about APR.

'And I've got the perfect way to do it.'

Do you guys know anything about APR?

-Interest charges.

-Yeah.

So we've done sort of a payday loan app.

I mean this thing's brilliant, cos you can really see visually

just how scary it gets so quickly,

just because of the type of APR that payday loans have.

So you were going to borrow 100.

By the time you got to seven months,

you'd be paying something like £822.

And then, if you let it go to a year,

over five and a half grand.

-I didn't know it could go up to that much money.

-Yeah.

Would this experience today put you off maybe getting

-a payday loan in the future?

-Yeah. Yeah.

Never doing it again.

'If the reasons for wanting a loan

'could be a little unexpected...'

What did you need the loan for today?

Holidays and stuff.

Mainly for the house.

We'll just talk about why you came in today for the loan?

To get some coke?!

'..I was also struck by how many people hoping to get one

'don't even have a payday.'

'But it was clear some of them, like Dean,

'had a desperate need for cash.'

How bad has it got today towards money?

Haven't got no money at all. So that's why.

We've asked all the family members and stuff like that,

but they're in the same boat.

They haven't got no money, so that's why we came here today

to see if we could get any money so we can put gas and electric on

and some food and that, just to get us through.

So did you leave the house today looking for a payday loan company?

Yeah. You have to do anything to get money these days, don't you?

You have to try.

I like being independent, but there's times

where you have to ask people for help. But I don't really like it.

I'd rather try and do it myself. It makes you feel small.

-How old are you?

-Me, I'm 21.

And you guys don't have anyone else that will help you with money?

No. My dad just died four months ago.

Where's your mum?

She left me when I was like two-year-old.

The only person I've got now is my girlfriend.

I don't have no-one, nowhere else.

MIQUITA SOBS

I just feel really bad for him.

His dad's just died and he doesn't have any family.

He's, like, really trying to change his situation.

And he's now going to get a payday loan.

It's like watching him walk in the completely wrong direction.

'But Dean's situation isn't unique.

'In 2004, the rate of unemployment

'in under 25s stood at just under 12%.

'Today it's almost double that.

'And nearly a quarter of this age group rely on benefits.

'It's a story Dennis Hussey from the National Debtline

'hears all too often.'

Why are we young and British and broke?

I think the country, economically, is struggling much more

than it was a few years ago.

Benefits are being cut, there are less jobs out there than there

were before and it means that everyone is feeling the squeeze.

Even though there's less money to go around,

the cost of living is still rising.

But there's less money available to pay these bills

than there was before. And these payday loan companies

that you see all over the high street

have spotted a gap in the market over the last few years

and they have filled that gap very effectively and very ruthlessly.

And what was that gap?

The immediacy that people are used to now and expect?

-Getting things quickly?

-The immediacy is one.

Whereas, in the past, people might have been able to get more

assistance from the benefits system, crisis loans, short term help,

that assistance is being reduced,

so people have to turn elsewhere.

The money is still needed. Where do you go for it?

You go on the high street or you go hungry or cold, or both.

'I've come to Swansea.

'It's another area struggling with the effects of the recession.

'And also home to Serai, who, for the last two years, has found it

'hard to ignore the avalanche of payday

'and doorstep lenders offering to solve her money troubles.'

So how long have you lived in this area?

I've lived in this area for four years now.

I grew up in Trallwn, which is the area over that side.

So you have been here for, like, four years.

Since you've been in the area, have you noticed

people talking about these companies more and more

and just generally feeling that more people are involved with them?

Now everybody is talking about it.

I see different people all the time, it's like, "Oh I've got a loan.

"I owe this much to Wonga or Provident or anybody."

It's almost like the area is under siege from payday loan companies.

-This is my favourite age.

-When they can't walk or talk?

Yeah. No answering back.

'Serai and best friend Katrina are both members of a group

'for young mums, most of whom are affected by bad debts.'

-How many ladies are in the group?

-Nine of us.

And how many out of the nine have loans with payday load companies?

Five of us.

Five out of nine do?

'But none of those five have jobs.

'They were offered loans on their benefits and tax credits.'

What is absolutely ridiculous to me

is that they are called payday loans. You weren't even working.

-So this wasn't a payday, this was your benefits paying back.

-Yeah.

Did they ever talk about the fact that you weren't actually working?

They'd ask, first off, "Are you working or are you on benefits?

"You're on benefits?"

And then they'll just take in how much you actually receive

a week or a month and they'll say, "Right, OK, that's fine."

But it's never seen as a negative.

They're never like "OK, if you're on benefits, we can't do this."

No. As long as you have a certain amount coming in,

they'll be fine with it.

'Serai and Katrina both got into trouble as their first

'Christmas as single mums approached

'and they started receiving text messages

'and leaflets through the door offering them loans.'

They know it's the most money-making time for them.

They know people in our circumstances,

especially if they've got one or two or more kids,

they need money and they're going to struggle

and they start targeting.

Was it like that for you, as well?

Yeah, I wasn't with the baby's father.

So, for Christmas I had done it on my own,

so I ended up getting a loan out.

It looks really easy, you know?

You borrow this much, you pay this much back

in 30 days or however many days,

and it looks really reasonable,

until you've got to pay it back.

What do you do in that situation, then?

Borrow more money.

Shall we do some crafts?

Whilst trying to provide for their young families, both girls now

found themselves with bad debt problems.

Mummy, is that the same yellow?

'Serai's led her to nearly having a breakdown.'

What were you feeling like?

I was really depressed.

I couldn't leave the house. I couldn't face anybody.

Me and the kids were in the house every day

and I just felt like ending it.

I was so bad.

It was because of all the debt.

It was the lowest moment of my life.

I was just terrified, I was scared.

I was on my own.

I'm going to start crying!

It feels like you girls were getting them to help you feel

independent and be able to look after your families on your own?

Yeah.

I felt like I couldn't pay for my kids.

Oh, my God!

'The girls freely admit they shouldn't have borrowed

'the money, but they believe that the companies targeted them

'when they were most vulnerable.

'And when someone's offering what seems an easy fix,

'it can be hard to say no.'

Do you want to walk on this side?

'Cases like this are one of the reasons why the payday loan

'industry is now under so much scrutiny.

'People like Serai, who can't afford to pay the money back

'have ended up taking out another loan and another

'just to keep their head above water.

'It's what's known as a "rollover",

'and it's these loans that make lenders the most money -

'in fact, almost half of everything they pocket.'

'I want to know how some of these companies decide who to lend

'to in the first place.'

'And I've been put in touch with someone who's ready to

'expose their secrets.

'For six months, he worked for one of the high street lenders

'and experienced their strategy first-hand.

'He quit, but, still worried about repercussions,

'he doesn't want to be identified.'

Were you ever given any rules on someone's vulnerability?

No. There were no rules whatsoever with vulnerability.

It wouldn't matter if they came in

and they looked like they'd slept at a shelter.

If they had a bank statement, if they had their ID

and they applied and got accepted

you would give them that loan.

And I remember, in my first week, I would be corrected by my

manager that as soon as they said they weren't working,

they would be like, "No, but they've got children,

"they might get tax credits. Do it off the tax credits."

The people that I saw coming into the shop are people

that are struggling to feed their children.

I just think that's so... It just feels so immoral.

The idea that I was earning money from this it was...it was horrible.

'He only worked in one store, but hearing from our whistle-blower

'has confirmed my worst fears about how some of the industry works.

'So at what point does profit become

'more important than everything else?'

'I'm on my way to meet someone whose loan has cost more than just money.'

I've been here for just over a year now, so I'm getting used to it.

-It's not much, but it's my home, though.

-Yeah.

So it's always been just you?

In this flat yeah, yeah. It's always just me.

'When Chris left work due to ill health, he felt he had no choice

'but to take out a £400 payday loan to cover his bills.

'He soon ran into trouble, and couldn't afford to repay it.

'But the lender wanted their money back.'

They weren't prepared to reduce it to a manageable amount,

they weren't prepared to give me a repayment plan.

And I was living at my parents at the time.

Right. Did your parents know what was going on?

They did, when the letters started coming

and the phone calls started.

Letters with red writing.

"We're going to send bailiffs out

"and we are going to repossess property in your house."

-That's their property?

-It's their property and the last thing

they want is bailiffs coming and taking their stuff

to cover a loan that I took.

So it would start arguments between me and my mum

and then it would start arguments between my stepdad, as well.

And it just got to a point where they didn't want me in the house.

So after a while, it's not even about the money any more?

No. You might have £900 debt

but I had priceless amounts of family damage.

'The pressures of dealing with his illness,

'combined with the stress of the barrage of calls and letters

'to his parents' home led Chris to breaking point.'

The night that I ended up here,

I felt like I had nowhere to turn.

This is a point you'd got to emotionally

because of the things that had happened?

Everything that was going on, I just could not bare to live.

I didn't think, it wasn't pre-meditated.

I climbed across the bridge

and I was on this side of it, just holding on to one of those pipes

ready to let go.

I was very emotional, I was crying.

But I was... No fear.

I was very prepared to let go.

To me it at the time, it was scarier to think that

I had to wake up tomorrow to deal with it all again.

Medical professionals, myself included, my family all agree,

the final straw was the payday loan company.

And that's what pushed me to attempt suicide.

'Chris was sectioned for his own safety in a secure hospital,

'but even there he found the company refused to leave him alone.'

I was in a psychiatric hospital for just over four weeks

and even when I was in there, I was getting phone calls.

First thing they would say is, "Can you make a payment today?"

And I'm, "Sorry, no, I don't have access to a debit card."

Do you think they knew what kind of establishment

they were finding you at?

I did explain to them I was on a psychiatric ward.

-You can't just pop...

-Pop to the cash point.

I couldn't even pop to the local shop just around the corner.

I was on that ward for my own protection.

There's big, huge electromagnets holding the doors shut,

or else I'd have broke free weeks ago!

And then... No, I can't get to the bank.

No, I can't pop to the bank.

To be honest, looking back,

you couldn't make the story up.

'With the help of Citizens Advice, Chris's lender eventually

'agreed to a debt plan allowing him to pay off a pound every month.

'But after a rift with his family,

'and thoughts of ending his life, he feels the pressures

'created by that £400 loan caused his life to unravel.

'And it will be hard to get over the damage.'

I'm feeling quite shocked after what we're finding out.

Actually, quite angry, because these companies are giving out

loans to people who are not in a financial position

to ever pay them back.

Someone like Serai should never have been given a loan.

And then, when they can't pay them back, they're being harassed

and pressured to the point where they're actually contemplating

taking their own lives, like someone like Chris.

And it just feels like the companies have absolutely

no regard for their customers or take any

responsibility for the position that they're left in.

'Attitudes towards payday lenders have begun to change.

'An official report three years ago said they provided a legitimate,

'useful, service that helped to cover a gap in the market.

'But, this year, the Office of Fair Trading said that there

'was widespread irresponsible lending in the industry.

'And, all over the country, the fight back has begun.'

The Wonga conga!

# Let's all do the conga

# Wave bye-bye to Wonga

# Na na na na.... #

This is a national day of action against payday loan sharks!

This national day of demonstration attracted thousands of people.

Look, it's like Free Willy, except it's not Free Willy,

it's In Debt Willy!

Payday loan companies who offer you instant cash

with no background checks for extortionate rates of interest.

It's predatory, it's predatory lending.

-No to payday loan sharks!

-No, say no!

No to payday loan sharks! No, say no!

Someone who's definitely had enough of the worst of the industry

is Jolyon Rubinstein.

Borrow £50 to £500.

He's the face of BBC Three's comedy series

The Revolution Will Be Televised

and he's also a friend.

TV: So is 219.1% APRA, is that a good deal?

'Last year, a sketch on his show caught on camera how some

'lenders do only the most basic checks about

'whether you can afford to take out a loan.'

350.

-We do loans up to £5,000.

-Oh, great!

'And they didn't seem to be bothered about how you'd spend it.'

I need the money to pay back some gambling debts

and some drug debts. Is that all right?

As long as we get paid back,

we don't care what you do with the money.

As long as we get paid, don't care what you do with the money.

I'll have £300, then, please.

That's no problem.

For me, I thought that when I was like,

"Right, I'm a drug dealer",

I thought that would raise a red flag.

So that was fine. And that didn't. That shocked me.

I mean, when you start saying to people,

"Can I pay you back in weed?" You know?

And then they're like, "No, you can't,

"but when would you like an appointment?"

I mean, anyone in their right mind presented with that,

you'd think that someone would be like, "This person is unstable.

"This person is not really the sort of person you should just be

"giving loads of money to and lending it to"

This business is entirely dedicated to profit at all costs.

Absolutely nothing matters, apart from the ones and the zeros.

'But a lot's happened since Jolyon's filming.

'In March this year, the Office of Fair Trading told the 50 biggest

'payday loan companies they needed to clean up their act

'and stop running misleading ads,

'make sure they give clear information

'and better check that borrowers are able to pay back the loan.

'So, has that done the trick?

'To find out, I'm going to go undercover

'to see if some payday lenders are still breaking the rules.

'It's nothing like anything I've done before, and I'm terrified.

'For moral support, I'll be taking an old acquaintance with me.'

-How are you?

-Not bad.

'With nine payday loans to his name, Josh is better placed than most to

'help me get the answers that I need.'

We look like we're going to war or something!

It says on the front £200 interest free loan.

See what they say about that.

'We called into ten loan shops in towns around the North West.'

Roughly, about £100.

'And it did seem the crack down on payday lending

'is making a difference.

'Some of them said they no longer offer payday loans

'and they were very open about why.'

'But that didn't mean they were squeaky clean.'

So if there was a young kid who

was quite blatantly borrowing money

so he could buy drugs, it's just a complete

lack of responsibility to go,

"No, we don't care. Once you've got the money, it's up to you."

'More than half of the shops we asked

'would still give us a payday loan

'as long as we were getting money coming in from somewhere.

'They didn't care if we had a regular payday,

'and were more than happy to lend against benefits.'

'So they saw no problem in using the money

'I would be getting to feed my kids.'

'Most surprising of all was that we still rarely got any

'explanation of interest rates

'or of how the cost of the loan could spiral.

'That's something they all should be doing.

'But instead, some downplayed the APR, saying it's not

'relevant for this type of loan.'

'One shop did try and spell out the maths to us,

'but, unfortunately, they got it wrong.

Thank you.

'In fact, that shop's interest would be more than twice that.

'No-one is saying that these sums are easy.

'But if we're relying on them to explain things,

'you'd hope they'd get it right.'

You're really good.

I don't know how I would have done it without you, actually.

Really pushy! I can't be pushy.

'Very few lenders did everything by the book.

'But, with no two of them operating in exactly the same way,

'it seemed like some of them were

'almost making it up as they went along.

'And I can't quite believe that even now, after all the flak they've

'been getting, some of them still don't seem to be

'lending responsibly.'

'But I want to hear what the industry itself has to say about how

'they lend money, so I've come to the organisation

'that represents most of them.'

Why do you think there is so much negative

attention on payday loan companies?

It's an industry that's grown up under the spotlight, however

I can talk about the positives that

we've seen on a day-to-day basis.

Eight out of ten pay it back in full and on time.

So you feel that maybe everyone that is negative about

payday loan companies, they've just got it wrong?

No, I don't feel like that at all.

There is bad practice out there and we're working quite closely

with the regulator to make sure that's eradicated.

So what checks do your members do before lending money?

Is it really possible to do the right type of checks?

Within ten minutes you can find out

whether someone has the right affordability?

Yeah, they happen within a split second,

through the credit reference agencies,

all the online databases.

They can get that information immediately,

the same way credit cards do.

The difference is the speed that the money lands in your bank account.

How many people do you think really understand what APR is?

I had no idea what it meant.

It's really misleading, cos it's annual,

whereas our product is obviously very short-term.

Our members are committed to showing it - you have to show it, cos

it's a regulation - and they'll talk you through and explain it,

but they'll also tell you what

the cost of the loan is in pounds and pence.

I feel that there are some people that we just know are

a bit skint - they're on child benefits, they're on JSA -

and the last thing they need in their life is a payday loan.

I think that's a difficult one, cos if their income

and expenditure is there and they can afford to pay back

the loan and they need it, then I don't

think we can decide whether they're right to have that access to credit.

They obviously need it for a reason, for a purpose,

-whatever it may be, whether it's an emergency.

-Yeah.

Where would they go if they couldn't access a payday loan?

Aren't the loans being given out irresponsibly in the first place?

I think it's important that the loans are only lent to people

who can afford to pay them back.

There's no commercial or business sense in lending to

someone who's going to run away with 100 quid

and you're not going to see it again.

'She makes it all sound very positive, as does Wonga.

'The biggest in the business told us they don't see themselves

'as a payday company because their loans have more flexibility.

'Like some other lenders, they also freeze interest rates

'so it can't spiral.

'And, as all lenders now have to, they told us that they limit

'the number of times a loan can roll over.

'But, even so, I've seen with my own eyes the devastating

'consequences when lenders don't stick to the rules.

'And I've met people who'll be paying off their debts

'for years to come.

'But there are others who won't get that chance.

'Kenny Davies was a rugby fanatic

'and played with a group of lifelong friends.'

You've been playing rugby together since how old?

Since we were under sevens, under eights. So seven years old.

Just the most funniest, maddest guy you'd ever meet.

He was just the one always having a laugh.

Crazy, I'd call him, as well. He was.

Everyone loved him. That's why it says legend.

Everyone used to call him Legend. He was heart and soul of the team.

Did you have any awareness of the fact that he was in debt?

I knew he was in debt, obviously,

but I didn't know how far in debt he was.

After Christmas, he hurt his ankle, so he couldn't

work and that's where the spiral obviously went down from there.

-That's when you think he probably first took out a loan?

-Yeah.

Obviously he thinks he's working the week after and it's

when you don't work the week after

and you're going downhill, aren't you, from then.

You can't make the repayments because

you're in that instant mess, aren't you?

Why do you think Kenny chose to go

to a company like that to help himself?

Because I think maybe he didn't see any other way.

He's a bloke, he's proud, you know what I mean?

He wouldn't come to us lot and go,

"Could you give us some money?" or, "I need help."

He would've tried to do it secretly.

He wouldn't want family and friends knowing he was struggling.

'With spiralling debts, Kenny couldn't see a way out.

'Said to owe thousands to payday lenders,

'he took his own life in the very field he played rugby.'

I was driving up Agecroft Road down there and me mate rang me

and my mate rang me and he just said,

"Kenny's killed himself."

I started butting the wall, going mad.

I didn't believe it. My mum and dad said, "What's up with you?"

And I was just a mess. Then it got worse, everyone crying

and holding on to each other and stuff.

How do you feel about the fact that he killed himself in this park

where you all grew up and where you played rugby for so long together?

Erm...

I just think he hoped...

he hoped to stay there. If that makes sense.

He hoped his spirit was here and that's why he did it here.

I don't know.

Actually, when he died, we all come here and just spoke about memories.

We were here all night talking.

He shouldn't have died.

'His friends are in no doubt that the lenders Kenny

'borrowed from share some responsibility for his death.'

It's such a dark thing that's happened,

a tragic thing that's happened.

It's quite strange that the adverts are so jolly and colourful.

Exactly. They don't show you the people crying

tears at home when they can't afford to feed their families and they've

got to - that's the last resort - to go to one of these companies.

If you can't afford to pay off £100 debt,

how are you going to get yourself in £400 debt and pay that off?

That's why they're just ripping people off.

I wish they weren't there.

'Love them or loathe them, there is no doubt payday loan companies

'offer something that traditional banks can't and won't compete with.

'And when they behave responsibly

'some can offer an invaluable service.

'But there are other places you can go to source

'a less risky short-term loan.'

'Struggling with debts through doorstep and payday lenders,

'Serai and Katrina, the Swansea mums I met earlier,

'have joined the local credit union, a sort of community bank.'

Why have you decided to come to the credit union today?

We've come to open up a savings account with them.

What did you know about it before you got here?

Not a lot. We've come to find out a bit more, see what they do.

The main thing is that the interest rates are extremely low

and that they do put quite a lot of emphasis on saving your money.

Helping you save.

I'm really up for saving now and being able to sort my money out

and keeping myself in check now, as well.

'There are over 500 credit unions across the UK offering

'savings and loans to their members.

'Most now offer current accounts,

'and a few even offer mortgages.

'So far, over 1.5 million of us have signed up.'

So why do you think the girls should be here?

It's a lot cheaper than a payday loan company.

We only charge 2% interest per month.

Oh, my God, that's a totally different kind

-of number than a payday loan company.

-Yeah.

The thing with our loans is we take time in looking at them

and making sure people can afford them,

rather than just approving them straightaway.

It's sort of a good thing, though, isn't it?

-It's like it is actually being thought through.

-Yeah.

I want to sign up and do it now, yeah.

Have a card!

'Our Swansea mums aren't the only people I've met now

'reorganising their finances.'

'To pay off her £1,000 debt to her parents,

'Lauren has had to put education on hold and take two jobs.'

Are you angry that this thing has happened?

I don't want to say happened to you,

cos I think you know that it was your choice,

but are you angry that this is now part of your story?

Life isn't all roses, is it?

It doesn't all go exactly to plan.

But, at the same time, it did make me

stop in my tracks in the end,

when my mum went absolutely, like, ballistic, at me

-and I honestly haven't done anything since.

-Yeah.

For the last few months, I've actually got from one end

to the end of the month and I've had money at the end of the month.

-Oh, my God, that's a great feeling!

-Yeah, it's really, really good.

I don't know, something kind of clicked.

It all like... It kind of grounds you.

'But the one I'm most pleased about is my Rochdale friend, Josh.'

So how are things now for you, Joshy?

-Brilliant. I've signed up to an agency...

-Brilliant.

..since we did the secret filming.

-And they've got me a job at a place...

-So you have got a job?

Yeah, I've got a job.

This is what I wanted to hear today, Josh. That's so brilliant.

The best part about that is that I can now start a debt management plan,

which means, basically, they freeze the interest, which is a good thing.

And they work out what I can afford each month

with still my living expenses, as well.

So I can pay off my debts

but still have money to live at the same time.

And now, I don't get a phone call, don't get letters.

-You have your life back!

-Yeah.

What's it like when you do walk down the high street

and you see payday loan shops now?

-How do you feel?

-Just laugh.

-You laugh?

-Yeah.

-We can now chuckle in the face of payday loan shops.

-Yeah.

It were embarrassing, walking past before,

-cos they know that I owe them money.

-Yeah.

Now I can walk past with my head held high,

knowing that they're getting paid off.

I love that you feel like that. That's brilliant.

-I'm so happy for you.

-Thank you.

-Really, well done, Josh. Really.

-Thank you.

'Hearing about the problems caused by payday loans, it would be easy

'to say lenders need to be reined in more and,

'in the worst cases, maybe even stopped from trading.

'But some of them do play by the rules.

'So when trying to decide who's responsible for all this,

'I can't help thinking there's blame on both sides.'

Anyone that takes out a payday loan of course takes full

responsible for taking it out.

No-one forces anyone to take out a payday loan.

But I don't think half the people that get them

know what questions to ask the companies and it's absolutely

up to the companies to give out the right information.

Cos it just...it terrifies me that if people aren't getting

the right information, that they're going to continue to get into actual

real trouble with companies they thought were there to help them.

'A million people are going to be taking out payday loans

'for Christmas this year.

'But if the money's not lent responsibly, I wonder how many

'of them really know what they're getting into.'

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