MORE than 600,000 hard-up families will take out extortionate payday loans to pay for the cost of Christmas, a Sun on Sunday investigation can reveal.
Some are now being tempted into pocketing payday by festive-themed “introducer sites”, which coax them in to the hands of lenders.
Borrowers can then be hit with huge rates of interest – sometimes DOUBLE the loan amount – leaving them with terrible credit scores, CCJs and crippling debt when they can't pay.
The sites either host adverts for regulated loans companies placed by search engines, or pass details on to other genuine lenders with high rates of interest.
One, Christmas LoansUK, hosts ads for lenders such as Cashflex.
ChristmasLoansUK owner Nicholas Massey, of Smethwick, West Mids, admitted to “misleading” people.
He said: “I'm not an official lender. I'm the middle man benefiting from Google's advertising programme.”
Britain seemed rid of Wonga-style payday lending after finance chiefs capped interest on loans of 30 days or fewer at lb24 per lb100 borrowed.
While this initially saw the number of borrowers fall from 1.4million to less than 500,000, the Money Advice Service expects an increase over Christmas.
Another website is MyQuick Loan, run by McCrory Finances Limited.
It offers a lb400 loan for 90 days – outside the FCA's 30-day cap – with interest of lb161.92.
It warns rates could double when the customer is passed to another lender.
Owner John McCrory, of Macclesfield, Cheshire, said: “People understand what they're engaging in – it's clear.”
Mum-of-four Sarah Carty, 40, turned to a payday lender in December 2023.
She endures advantages of lb500 per month in Newcastle, and wound up on 100 percent interest on the lb600 loan from Lending Stream.
She said: “After annually I couldn't afford it. I can't get credit at all now. I've learnt my lesson.”
Lending Stream was not open to comment.
The Consumer Finance Association, addressing some payday loan lenders, said: “Less than one percent of people uses payday loans”.