Public warned not to use moneylenders for Christmas cash

The Central Bank of Ireland today asked consumers to "think twice" before using the services of moneylending firms this Christmas.

Research on the Moneylending Industry last year showed that more than one in five consumers (21%) took out a new loan before another loan was paid off.

Of these, 27% of the consumers interviewed claimed that they had used their new loan to reduce an existing loan.

Director of Consumer Protection, Bernard Sheridan, said "Households often have additional expenses at this time of year, and consumers could be tempted to take out additional loans to cover these expenses, including from moneylending firms.

"This could take consumers into a rolling cycle of high-cost borrowing and potential debt, especially given the high-cost nature of moneylender loans, when compared with loans from banks and credit unions.

"If a consumer does choose to take out an additional loan from a moneylender they should check that the moneylender is licensed by the Central Bank.

"Moneylenders licensed by the Central Bank are prohibited from keeping any amount of a new loan to repay an existing loan."

He also had advice for those experiencing financial difficulties.

"If you have missed repayments, you’re protected insofar as your moneylender cannot charge you extra," he said.

"However, if you find yourself having difficulties managing your money, contact the Money Advice and Budgeting Service who offer free budgeting advice and will help you manage your debt."