Worse than Jaws
I've just added my name to a petition that political pressure group, Compass, is currently running in an attempt to end legal loan sharking. Yes, that's right, this practice, where irresponsible lenders charge whatever rates they want, is actually legal and is repeatedly tipping customers into inescapable cycles of debt and poverty.
Despite the Bank of England base rate being just 0.5%, some loan and credit companies are charging annual interest rates equivalent to over 2500%. This is surely wrong, but there is currently no ceiling on the amount lenders can charge. The Government has already committed to regulating excessive interest rates on credit and store cards, but it makes sense that all forms of consumer credit should have a rate cap. Until then, this practice will continue.
I have been a strong supporter of affordable short term credit, provided by the likes of local credit unions, cooperatives and mutuals. Often the lower income families are not catered for by many high street banks and that's when the loan sharks come in to play. Ironically, it is those who are most in need that end up paying the highest rates to obtain credit. Therefore, as well as a rate cap on irresponsible lending, affordable sources of credit need to be developed so that people do have options.
It is a very complex issue and certainly not one that will be solved overnight, but signing the petition and emailing the Prime Minister with your concerns on legal loan sharking is a pretty good way of putting the wheels in motion.
Despite the Bank of England base rate being just 0.5%, some loan and credit companies are charging annual interest rates equivalent to over 2500%. This is surely wrong, but there is currently no ceiling on the amount lenders can charge. The Government has already committed to regulating excessive interest rates on credit and store cards, but it makes sense that all forms of consumer credit should have a rate cap. Until then, this practice will continue.
I have been a strong supporter of affordable short term credit, provided by the likes of local credit unions, cooperatives and mutuals. Often the lower income families are not catered for by many high street banks and that's when the loan sharks come in to play. Ironically, it is those who are most in need that end up paying the highest rates to obtain credit. Therefore, as well as a rate cap on irresponsible lending, affordable sources of credit need to be developed so that people do have options.
It is a very complex issue and certainly not one that will be solved overnight, but signing the petition and emailing the Prime Minister with your concerns on legal loan sharking is a pretty good way of putting the wheels in motion.