Posts Tagged ‘consumer credit (regulation and advice) bill’

Exploitatively high-cost lending has to stop

03/02/2011, 07:00:08 AM

by Sally Bercow

If you’re lucky enough to live in a Royal Palace, you’re not surrounded by “gold for cash” pawnbrokers. Neither do the door-to-door moneylenders that plagued my street in Tower Hamlets come to call. So I’m not going to go all faux woman of the people and pretend I rely on high cost credit. I don’t, haven’t (leaving aside the odd store card) and hopefully never will. But too many people in Britain do; millions of low income households depend on loan advances from pawnbrokers, payday lenders and doorstep lenders just to make ends meet.

These loans with sky-high interest rates come with devastating consequences, as borrowers are forced to cut back their spending on food, rent, utilities, fuel and other essentials in order to meet their loan repayments. The debt trap is blighting the lives of too many people, causing physical and mental health problems, damaging local communities and increasing the pressure on the public purse. In other words, high-cost credit affects everyone, whether you use it or not. (more…)

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The government’s silence on legal loan sharking is putting families at risk

06/11/2010, 10:00:59 AM

by Stella Creasy

LAST WEEK  I wrote that loan sharks are circling Britain’s poorest families, excited by the likely effects of the Government’s spending review and lying in wait to prey on people’s increased financial vulnerability. This week, thanks to the hard work of campaigners and opposition MPs, the sharks are now starting to come under threat themselves.

My consumer credit (regulation and advice) bill, which seeks to combat exploitation in the payday and doorstep credit market, passed through its first reading this week. The bill pushes for a range of measures including a cap on the total cost of borrowing money, an expansion of credit union access points through the postal network and a levy to provide funding for debt counselling services to help those in financial difficulty.

It was supported through its first reading by a large number of Labour MPs who believe if the government is intent on pushing their budget on Britain, it will raise the number of families living with the daily misery of debt. We want them to take responsibility for the consequences of their policies– and judging by the growing public concern we are not the only ones.

According to the association of business recovery professionals, four in ten people are worried about their current level of debt, with three million fearing redundancy and two million having taken on more debt in recent months. (more…)

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The loan sharks are circling, and the government doesn’t care

30/10/2010, 10:30:25 AM

by Stella Creasy MP

Some facts are already depressingly familiar: the spending review will put half a million public sector workers out of a job; another half a million people in the private sector are expected to be fired as the economy slows.  Measures which support family incomes – whether tax credits, child benefit or the child trust fund and the savings gateway – are being stripped away. It is the perfect storm that occurs when liberal and conservative dogma are combined: a government imposing draconian cuts with one hand and taking away mechanisms to help people stay afloat with the other.

Here’s a consequence of the budget less widely publicised: the (loan) sharks are now circling Britain’s poorest families, watching them struggle financially and sensing a business opportunity. Indeed, the dishonestly named Peter Crook, chief executive of Provident, is delighted with the turn in events. It is no coincidence that following the comprehensive spending review his company’s share price rocketed by 5%. Provident offers short-term credit with a typical APR of 272% to those for whom banks and credit cards are out of reach – mainly women, the low paid and those with poor credit histories. It is a company that makes money by locking people into cycles of debt, interest on debt, late payment charges and interest on late payment charges. (more…)

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