Miquita Oliver: bankruptcy and what I’ve learned about payday loans
Debt - and the pressures it can create - is something I've experienced first-hand, so it was to help people better understand their money that I so passionately wanted to make 'Young, British and Broke: The Truth about Payday Loans' for BBC Three.
I went bankrupt because of unpaid taxes, and it was a situation I found hard to face up to. I couldn't tell anyone about it; I was so scared about my future and there were times when it felt like I couldn't breathe.
I remember I took all the bankruptcy letters, put them on a balcony and just set alight to them. I thought I'd get through it, get back on my feet, and no one needed to know.
Payday loans: check the costs
- Advertised monthly costs may seem low, but annual rates are significant
- Loans are quick but customer service can be poor. The Financial Ombudsman receives more than 50 complaints about payday lenders every month
- Other lenders like banks or credit unions may offer a better deal. Here are ten things to check before you take out a loan
Of course it didn't work out like that. But it meant when I was approached about this film, I was keen to see how many of the people who take out payday loans really understand what they're getting into.
All I knew about them at that point was what I'd read in the papers - most of which was negative. But as the filming went on I realised things weren't that simple.
I've met people who've made these loans work really well in their life, so it's clear they can provide a service, and fill a hole in the market - provided we, as customers, are being given all the information we need to know.
Unfortunately that doesn't always happen, and it seems to me there are some companies that have little regard for their customers.
I was shocked with the way they can contact borrowers having problems with repayments - at their work, by text, phone, etc. Knowing how suffocating it can feel to be chased for money you don't have, I would question whether companies should be allowed to push people this hard.
The whole way in which they lend needs to be thought through a lot more, and clearly in some cases things needs to change.
I've also been surprised by the real poverty that we have on our doorstep - the abject poverty that exists up the road. Some of the people we met, especially in the fake payday loan shop we opened up, really seem like the forgotten people.
I'd expected to see people wanting loans for mending a car or a washing machine, but I met really desperate people needing them just for food.
End Quote Miquita Oliver
I'd expected to see people wanting loans for mending a car or a washing machine, but I met really desperate people needing them just for food.”
For me though the most shocking discovery was how fast what you owe can spiral out of control. I knew that the rates for these kinds of loans were high but I didn't understand what that meant practically and how much they can increase by.
It's taken me a long time to get my head around things like APR, so I think it's a lot to ask people to take it all in a quick appointment at a payday loan shop.
Everyone knows if they take out a loan there will be something to pay back but I don't think that we always think through or are made aware of the consequences, and that's to do with a lack of education around money and debt.
Go for a loan of £100 and even when you realise it's going to cost £125, you might just think about the £25 extra - forgetting that if you've already spent the £100, in reality its £125 you'll have to find the next month. So I can see how some people have got into a cycle of taking out another loan to pay off the first.
That's why for me this interest calculator is really useful. It makes much clearer the amount you could end up having to pay on a loan - and from seeing people's reactions when they use it, I know that's something they hadn't always realised.
Young, British and Broke: The Truth about Payday Loans is broadcast on BBC Three on 3 December 2013 at 21:00.