Student hanged himself after becoming overwhelmed by debt to payday loan lenders with interest rates of 1,200%

  • Naseeb Chuhan, 21, from Leeds, was found hanged after his debts spiralled 
  • Mr Chuhan was a first year human geography student at city's Beckett University
  • Coroner could now write to the FCA about payday lenders targeting students 
  • Leeds Beckett director told inquest it has 'a lot of students' who experience debt

By Martin Robinson, Uk Chief Reporter For Mailonline

Published: | Updated:

Naseeb Chuhan, 21, from Leeds, was found hanged after his debts spiralled after taking on payday loans with 1,200% interest rates

Naseeb Chuhan, 21, from Leeds, was found hanged after his debts spiralled after taking on payday loans with 1,200% interest rates

A university student killed himself after getting in debt to payday loan lenders who were charging him interest of 1,200 per cent, an inquest heard.

Naseeb Chuhan, 21, was found hanged after his debts spiralled and his death has led to a coroner being asked to write to the Financial Conduct Authority about students being handed dangerous loans.

Some lenders including Wonga were previously found to be charging up to 5,853 per cent in interest until rates were capped three years ago.

Mr Chuhan, who was a first year human geography student at Leeds Beckett University, was found dead at a flat in Hyde Park, in the West Yorkshire city on May 28 last year.

His father Kuljit Chuhan told the inquest at Wakefield Coroner's Court that he had discovered after his son's death that he been granted a number of payday loans.

Mr Chuhan said: 'In my mind what begins as something quite innocent and just as a one off and when you get to the end of that you realise you have overspent.

'I think it is something that slowly creeps up. I think that's how payday loans work. I think he was tempted into it.'

Priscilla Preston director of services for students at Leeds Beckett University, told the inquest the university has 'a lot of students' who experience debt.

Barrister Julie-Anne Luck, for Naseeb Chuhan's family, asked her: 'Are you aware of payday loan companies targeting the student population?' 

Mr Chuhan, who was a first year human geography student at Leeds Beckett University (pictured), was found dead at a flat in Hyde Park, in the West Yorkshire city on May 28 last year

Mr Chuhan, who was a first year human geography student at Leeds Beckett University (pictured), was found dead at a flat in Hyde Park, in the West Yorkshire city on May 28 last year

Miss Preston replied: 'Yes. I don't know how they do it. I should imagine social media is one tool they use.

Payday loan scandal: How the 'legal loan sharks' charged up to 5,853% in interest

In recent years payday loan firms were accused of of 'legal loan sharking’ because of their crippling interest rates.

Wonga, for instance, was seen chargeing 5,853 per cent in annual interest. 

For a £100 loan over 30 days it meant a person was charged £37 in interest.

The Archbishop of Canterbury, MPs and debt campaigners have joined the growing clamour of critics that has left such short-term lenders branded ‘legal loan sharks’.

Debt charity StepChange said that the number of people struggling to cope with payday loan reached almost 50,000 per year every year.

Some people have become burdened with so much debt from payday loan firms that it has driven them to suicide.

Ian Jordan from Botley, near Southampton, was driven to kill himself after racking up debts of more than £20,000 with at least nine payday loans companies — one of which was charging him 5,000 per cent interest.

The FCA then announced proposals to introduce a cap on the fees and interest charged by payday lending firms in a bid to protect borrowers from escalating debts. 

'It is something we communicate to students about. We encourage students to come in and talk to us about money worries.'

The inquest heard Naseeb started studying at Leeds Beckett in September 2015 and completed all the work required of him up to the end of that year.

But the inquest heard his studies started to suffer after Christmas and he failed to hand in course work and did not attend an exam in January 2016 or the resit in April.

The inquest heard Naseeb went to see a locum GP on May 25 and said he had been been feeling down for several years. 

Later that day he spoke to a student wellbeing officer at Leeds Beckett University's hub and an appointment was made for him to speak to a counsellor on May 27, but he did not attend.

Consultant pathologist Dr Lisa Barker, who conducted a post mortem on Naseeb, told the inquest the cause of death was hanging.

Coroner Jonathan Leach was asked to consider writing to the Financial Conduct Authority after he recorded a suicide verdict.

Miss Luck asked Mr Leach to send a 'regulation 28' report - requesting action is taken to prevent future deaths - to the Financial Conduct Authority.

Miss Luck said to the coroner: 'He succumbed to these easily accessible payday loans.

'It seems the behaviour and conduct of the payday loan companies was such that he was able to access loans where they were not affordable.

'Perhaps troubled by his mental health, he has not seen a way out has seen a solution in suicide.'

She added: 'He starts off taking out the loans in a relatively innocent way and he became dependent on these loans, they escalated with interest accruing in excess of 1,200 per cent.

'I would invite you to ask the Financial Conduct Authority what more can be done to make sure unaffordable loans can not be granted.' Mr Leach said he would consider Miss Luck's request.

An inquest at Swansea Civic Centre heard how the physics undergraduate - known as Mitch to his friends -wrote on Facebook prior to his death: 'I don't want to die, I think it is too late'
Mr Lewis died in May last year

An inquest at Swansea Civic Centre heard how the physics undergraduate - known as Mitch to his friends -wrote on Facebook prior to his death: 'I don't want to die, I think it is too late.' He died in May last year

In 2014 a struggling student who died from an overdose after taking out a payday loan which spiralled from £100 to £800 in just three months, posted on Facebook prior to his death: 'I don't want to die.'

Courtney Mitchell Lewis, 21, took an overdose of slimming pills after his short-term loan spiralled to eight times the amount he had borrowed.

An inquest at Swansea Civic Centre heard how the physics undergraduate - known as Mitch to his friends - had taken out the loan while struggling for cash during his studies.

The student, of Aberdare, South Wales, was working as a barman while studying at Swansea University but decided to use the payday loan company to borrow £100.

Colin Phillips, acting senior Swansea coroner, said: 'Mitch was a loving and caring individual who was facing a number of personal problems.

'He had debts after taking out a £100 loan which had increased to £800 within just three months.'

Overhaul needed: A coroner has called for a change to payday loan rules after disabled teenager Kane Sparham-Price, 18, killed himself on the same day Wonga left him penniless after emptying his bank account

Overhaul needed: A coroner has called for a change to payday loan rules after disabled teenager Kane Sparham-Price, 18, killed himself on the same day Wonga left him penniless after emptying his bank account

Last year a coroner called for a change to payday loan rules after a disabled teenager killed himself on the same day Wonga left him penniless after emptying his bank account.

Kane Sparham-Price, 18, from Ashton-under-Lyne, Greater Manchester, hanged himself after the loans company took payment for his debts under the terms he had agreed to.

After finding that the teenager had taken his own life, South Manchester Coroner John Pollard voiced concerns that there may be similar deaths in the future unless changes were made. 

For confidential support in the UK, call the Samaritans on 116123 or visit a local Samaritans branch, see samaritans.org for details.   

 

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Leeds student hanged himself after getting payday loans

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