9 January 2009
Sick and disabled claimants are being targeted by a company offering loans at an astonishing APR of 1355%.

Payday bank websiteClaimants searching for incapacity benefit or income support on Google are urged in an ad that is immediately served up to:

“Apply & Spend £750 Today”

The ad links to a site called paydaybank.co.uk which is run by a company called Milarco Ltd. The company offers ‘Payday Loans’ of up to £750 which it claims can be paid out in just a few hours without needing to fax copies of documents or see or speak to anyone.

All that is required is that you are over 18, currently employed and have your salary paid into a bank account.

The cost of the loan, however, is a staggering £25 (or £20 depending on which page of the site you are reading) per month for every £100 borrowed. Payday Bank admit that the APR of 1355% ‘may seem quite high at first glance’ but claim that because most of their Payday Loans are repaid over a period of no more than 70 days the APR ‘might be misleading’.

Some of the text on the site might also be accused of being, if not misleading, at least deeply confusing. This, for example, is how a page entitled ‘Reasons to borrow money’ begins:

‘It may seem obvious, but there are a variety of situations where people would be in the position to borrow money. There is, in fact, an endless ideology that follows that those who borrow the money are probably in the necessity of it.’

What is even more confusing is why a company which claims it is aiming its loans at people in employment chooses to target ads at sick and disabled claimants who, at best, will be working only part-time.

Adverts for loans aimed at incapacity benefit claimants have only appeared in the last few weeks and are, perhaps, a taste of things to come as the credit crunch bites and there are fewer people in full-time employment for companies like Payday Bank to prey upon.


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