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How Dickens' home town became the 'loan shark' capital of Britain

There is no shortage of cut-price deals on Chatham High Street. If you can't get what you need at Poundland, you can shave a penny off at the 99p Store down the road.

But that's nothing compared what's on offer a few doors down. Indeed, take a cursory look along this particular shopping parade and you could be forgiven for thinking they were giving money away.
'Borrow £200 for only £50,' screams one window display. 'If you've got a bank card and a job, get up to £1,000 today,' declares another.
Rich pickings: Just some of the pay-day loan stores within a couple of miles of Chatham High Street in Kent
Rich pickings: Just some of the pay-day loan stores within a couple of miles of Chatham High Street in Kent
A little further along, an entire window display is given over to an advertisement (in vivid canary yellow) offering payday advances with the question: 'Too much month not enough money?'
Yes, if you're in need of cash there is, it seems, plenty of it on offer in Chatham.
 
Last week the otherwise unremarkable suburban town found itself with the dubious honour of being home to perhaps the highest proliferation of payday lenders and the like of anywhere in the country. 
It makes you wonder what Charles Dickens — the town's most famous former resident — would have made of it. With tales of poverty, hard times and exploitation rife, he would have found literary pickings even richer today than in the 19th century.
At last count, there were 23 payday loan stores within a couple of miles of the High Street, going by the names of the Cheque Centre, Cash Converters and the Money Shop.
Not surprisingly, none of them actually gives money away. They offer quick loans to the needy, then, when the customer can't pay them back, they are faced with extortionate rates of interest. There have been reports elsewhere in the UK of rates as high as 4,000 per cent.
Cash Converters in Chatham, Kent
The Money Sop Pawnbroker in Chatham, Kent
Dubious honour: Chatham has perhaps the highest proliferation of pay-day stores than anywhere else in Britain
For example, borrow £200 from the Cheque Centre, fail to pay it back for six months and you're looking at a staggering £763 demand — that's the original £200 plus £563 in interest.

Last week, the Office of Fair Trading gave 50 firms, including market leader Wonga, a 12-week deadline to clean up their acts or lose their credit licences.
So how has this extraordinary state of affairs come to pass in Chatham, in the Medway district of North Kent, in the 'affluent' South-East?

Why are these firms free to spread like weed across hallowed streets once trodden by Dickens? It seems they are exploiting a loophole in  planning regulations that Labour leader Ed Miliband is desperate to plug.
This week, he used Chatham as an example of why an overhaul of planning laws is needed to prevent payday lenders — so-called 'legal loan sharks' — along with pawnbrokers and others from swamping the British High Street.
As it stands, if a payday lender wants to set up shop in place of a bank or estate agent, it is not considered a change of use.

Cash strapped: Pawnbrokers Albemarle Bond in Chatham has a sign on its shop front promising 'instant cash'
Cash strapped: Pawnbrokers Albemarle Bond in Chatham has a sign on its shop front promising 'instant cash'

As it stands, if a payday lender wants to set up shop in place of a bank or estate agent, it is not considered a change of use.

And given the financial climate, there is no shortage of vacancies: the national average for shop vacancies  in Britain's town centres is currently 14.6 per cent, but in Chatham it is  16 per cent.

A vivid example of the change can found at 157 High Street. Five years ago, there was a registered independent financial adviser specialising in offering mortgage advice.
Today, the building is occupied by The Money Shop — a subsidiary of a U.S.-based financial services company offering payday loans, cheque cashing, cash for gold and pawnbroking.
It doesn't quite offer cash for  selling your grandmother but, like its near neighbours Albemarle Bond, Cash Converters and H&T Pawnbrokers, it covers pretty much everything else.

There are two branches of The Money Shop in Chatham and two down the road in Gillingham. Business is clearly good. Life isn't so good, however, for those caught in their spiral of high interest.

Loophole: If a pay-day lender sets up shop in place of a bank or estate agent, it is not a 'change of use'
Loophole: If a pay-day lender sets up shop in place of a bank or estate agent, it is not a 'change of use'

Thomas Price, a 26-year-old security guard, borrowed £300 last August when his £900 pay packet was unexpectedly docked after a holiday.

'I knew about payday loans because they are always advertising in the windows in town,' he says.
Thomas and his partner Jordan Hufton, 22, who have a 19-month-old son, Lucas, insist they're very careful with their small income, which includes child benefit and tax credit, and splash out only on the occasional treat — such as their seaside holiday — when they can afford it.
So when Thomas's paycheck was short, they had no money for food and bills. A few clicks of the computer mouse led Thomas to online payday loan firm Wage Day Advance.
'It took me about an hour to do the application and about half an hour later the money was in my account,' says Thomas. 'We needed money because we were broke, but I did think I would be able to pay it back next payday.'

But after the repayment had been deducted, once again he found himself worringly short. 'We were in the town centre, so we went to the Money Shop and within about an hour I had borrowed £150.

'Affluent': Chatham is swamped by pay-day lenders despite being in the supposedly prosperous South East
'Affluent': Chatham is swamped by pay-day lenders despite being in the supposedly prosperous South East

Unsurprisingly, a month later, the couple found themselves trapped in an all-too-familiar vicious circle and eventually went to their local Citizens Advice Bureau for help.
Their debts — between £600-£700 — have been frozen and they are now repaying them slowly. 'If we hadn't got help, our debts would probably have got out of control,' says Thomas.
The Money Shop says it is simply offering a service to customers. A spokesman said: 'Our short-term loans, which are only available to individuals with a proven income and bank account, offer a convenient service.' 
But the question remains: why are the people of Chatham so down on their luck?
Back in the Eighties, Chatham was a bustling naval town, its dockyard the focal point of employment for much of the Medway area.

But in 1984 the dockyard closed with the loss of around 7,000 jobs. It changed the face of the region and its residents still speak of it as the root of the town's problems today.

Cash strapped: Chatham's famous former resident Charles Dickens wrote tales of poverty and hard times
Cash strapped: Chatham's famous former resident Charles Dickens wrote tales of poverty and hard times
Today Medway — population 256,700 — has the highest level of debt in the South-East, an average of £43,000 per person.
The number of people claiming Jobseeker's Allowance in January last year stood at 7,416, 14 per cent more than the previous year, and four per cent higher than the national figure of 10 per cent.
Vince Maple, Labour group leader of the local council, has formed a cross-party task group to tackle the issues surrounding payday loan companies.
Call for change: Labour leader Ed Miliband wants to overhaul planning law to stop pay-day lenders and pawnbrokers from swamping high street
Call for change: Labour leader Ed Miliband wants to overhaul planning law to stop pay-day lenders and pawnbrokers from swamping high street
'As a councillor for one of the most deprived wards in the country, it's depressing that these companies have taken this quite clear approach, preying on the most vulnerable in society.'

David Reade, 39, from Rainham, near Chatham, found himself snared. He has been looking for work since he was made redundant from his building job three years ago. He also cares for his wife Michelle, 42, who has kidney failure and has to have dialysis five days a week.
She requires regular treatment at hospital in London. When their car broke down, they borrowed £300 from Wonga.
'I needed the car to get to hospital, but then I couldn't pay the money back, and it just progressed from there,' said David. 'We needed money for food, for bills, so we got another loan. It seems like they just throw money at you.'
Eventually, again with the help of the Citizens Advice Bureau, the Wonga loan — which came, with interest, to more than £900 — was waived, but the Reades still owe money on a string of other loans.
The depressing reality is David doesn't really know exactly how much he owes: 'I kept getting them because it was so easy, but I won't take any more. The way they operate is disgusting. I can't see an end to it all — not unless I go bankrupt, then I'd lose the house.'

Back in Chatham High Street, there is a steady tide of business in and out of the local discount stores and charity shops.

While many premises stand empty, pawnshops and enterprises such as the Australian-owned Cash Converters have window displays glittering with jewellery and electricals.

Changing tide: The Kent town was once home to a bustling dockyard, providing a focal point of employment
Changing tide: The Kent town was once home to a bustling dockyard, providing a focal point of employment
Resale prices are not cheap, indeed, some items might be cheaper on eBay. An iPad was on sale for £350 and a Luxor 40in LCD television for £299.99 — the profit of someone's misfortune.
So what is the answer to the insidious rise of these companies which seem to bring short-term relief, but for many long-term misery? Better financial education would be a start, says experts.

Caroline Swift is chairman of Medway Credit Union — comprising members who live or work within a certain area and can  benefit from low-interest loans.

She says education is crucial. 'A lot of people have little concept of saving,' she says. 'I say to people: 'If you save £1 a week, it will be £50 in a year, if you save £50 we might consider loaning you £100.'

'The trouble is, many people think about money in very large terms. I ask how much they owe, and they say “only £5,000”. I could no more imagine adding “only” to £5,000 than I could of flying to the moon.'

Just down the road, outside a Gillingham pawnbroker, a gaunt young woman pushing a baby girl in a pram tells me she has sold her ring and earrings for £20. 'I'll get them back next month,' she says.
But jobless, and with two children and another on the way, what are the chances of that?

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