Pay day advances: the companies and their customers

Authors: Nicola Dominy and Elaine Kempson
Funded by: British Cheque Cashers Association (BCCA)
Published by: British Cheque Cashers Association (BCCA)
Publication date: 2003

This study was commissioned to provide an independent, in-depth understanding of the provision and use of payday loans. The research had a number of specific objectives:

• To describe the history, make-up and regulatory framework for the payday loan industry and set it within the overall credit market;
• To prepare a profile of the customers who use payday loans and their typical transactions;
• To explore the reasons why people decide to start, and to continue, using payday loans, including the alternatives (actual and perceived) they have available to them and their perceptions of costs and service offered by payday loan providers;
• To assess users' views and experiences of payday loans, the nature of their relationship with the payday loan provider, and their satisfaction with the service received.

The qualitative study was based on interviews with both providers and customers. It began with interviews with representatives of the British Cheque Cashers' Association, the trade association for payday lenders. This was followed by depth interviews with the employees of individual companies participating in the research. The third and fourth objectives were met by depth interviews with customers. In total, 30 depth interviews were conducted payday loan customers spread across four locations.