Lone parents forced to use moneylenders’

Evelyn Ring

The Social and Family Affairs minister has requested an urgent meeting with the banks’

representative body to discuss new research published yesterday showing that the average lone parent household is in debt up to E8,000.

It further showed that around E150,000 single parents are being forced to resort to moneylenders in order to pay the bills One Parent Exchange Network (OPEN), which represents 78 lone-parent groups, claimed that the denial of access to banking was forcing many vulnerable families on social welfare to deal with finance companies and moneylenders charging up to 200% interest.

Mr Brennan said his department’s Money Advice and Budgeting Service (MABS) also had evidence that other recipients of social welfare benefits were encountering considerable difficulties in opening accounts in banks and other financial institutions.

The minister also intends meeting with the ESB to discuss a claim in the study, commissioned by OPEN, that some lone parents have been charged 22% interest on arrears. This was unacceptable, Mr Brennan said.

Mr Brennan said he was concerned that many lone parents and other welfare recipients were being refused access to a bank account because they cannot provide identity documents to show who they are or where they live.

“There has to be room for a more flexible approach to the range of identification documents the banks and building societies will accept,” Mr Brennan insisted.

OPEN director, Frances Byrne, said it was ironic to deny single parents access to banking but to allow predatory lenders to knock on doors.

The study noted the majority of moneylenders on the register for 2004-05 were licensed to charge more than 100% APR, with many charging between 150% and 200%.

“If you are on a low income you are being denied access to banking, which means you are having to rely on people knocking on your door which de facto is going to cost you more,” she said.