Posts Tagged ‘legal loan sharking’

Your chance to help stop legal loan sharking

01/03/2012, 12:00:57 PM

by Stella Creasy

Legal loan sharks are the Japanese knotweed in Britain’s consumer credit market. These invasive companies flourish by exploiting the demand for credit from families who find their incomes squeezed by the rising cost of living, wage freezes and unemployment and so are forced to borrow to make ends meet.

The government’s refusal to act against this industry means Britain is fertile ground for their loans at interest rates which can run to 16,000%. Yes you read that decimal point correctly.

In the payday loan world, offering money without credit checkswithout advertising the costs and without any responsibility for the consequences is common place. When it comes to these companies, the impact of the extortionate rates they charge on the people they lend to comes second place to the profits they can make.

The chief executive of Wonga paid himself £1.6m last year, whilst Provident Financial posted a pre-tax profit of £162m in the year Britain went back into recession. As quickly as regulators try to address poor practices, another firm springs up ready to benefit from Britain’s dubious honour of being one of the few countries in the world where there is no limit on what you can charge for credit.

For nearly two years I’ve been calling for Britain to introduce total cost caps on the charges these firms can levy, putting a ceiling on the amount any loan could mount up to and giving consumers respite from the spiral of debt these firms can create. Twice now the government has voted against such measures, but as the evidence grows of the damage this is causing to millions of Britons they need us to not flinch from seeking every chance we can to make progress in championing the case for better regulation of these companies.

Such a moment of opportunity is upon us again.


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Together we can make the government act over legal loan sharking

16/12/2010, 12:00:42 PM

by Stella Creasy

Campaigns thrive on names and numbers – the more of either, the greater the chance of interest and engagement. History may lionise the lone crusader, but it is only through convincing others to join in that causes actually succeed. If we are to win the arguments for progressive policies, Labour must be capable not only of speaking up for our ideals but building a critical mass of active champions for our actions in every community.

Yet in the competition for the airtime of advocates that now defines modern politics, slick single-issue groups often surpass complicated political messaging. We know many people share our progressive instincts – and that many also baulk at the confusion of institutions we have set up to express them. Even the hardiest Labour enthusiast struggles to set out with conviction the vital differences between the GC, EC, branch and LGC meetings. So to, when supporters make the effort to attend such forums we can let detail on policy close down rather than open up debate. Too often we start by proposing motions for others to be for or against rather than with open enquiry and deliberation to see if we can find mutual terms for collective action.

If we are confident in our passion for social justice, we should embrace and enjoy the process of seeking shared ambitions as well as recognising the value of compromise along the way. This principle is not just about being inclusive; it’s also about being effective. Common cause is the foundation block for asking people to help and ultimately common endeavour. That’s why in the fight to end legal loan sharking, as much effort has been made not just to have the right arguments about legislation, but also to reach out to any and all those who share our concerns. (more…)

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Joe Cox presents the Compass campaign to end legal loan sharking

04/08/2010, 03:30:05 PM

The world of high finance can often seem a remote place. A friend once told me that after the financial crash and subsequent fall out that they were frustrated that they couldn’t link the behaviour of capital to the lives of ordinary people. The reason why citizens groups and citizens organising is all the rage at the moment is because it does this very thing – it links the intangible and the remote to the immediate.

After the financial crisis Citizens UK began to hear stories about the increase in interest rates on money loans. More and more stories also emerged about doorstep and other high cost lending. High cost lenders were targeting housing estates with offers of immediate credit at very high prices. Once people took out these high cost loans their problems often become worse and they had to borrow more. (more…)

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