Protecting the Poorest Consumers from Loan Sharks(December 09, 2010)
On Tuesday this week, Steve attended a rally in Parliament organised to highlight the unfair practices of loan sharks.
Research has found that around three million people in the UK use the 'door-to-door' or 'home credit' lending market, which can charge up to £82 in interest and collection charges for every £100 lent. Of these customers, around 10% have incomes of less than £11,100 per year. Many resort to this form of lending through having no alternative.
“Current arrangements mean that the UK’s poorest borrowers pay the highest price for credit in Europe and are extremely vulnerable to callous rip-off merchants,” explained Steve. “Many of my constituents despair after being locked into cycles of debt by unscrupulous payday and doorstep lenders. That’s why I’m so keen to support this campaign.”
At Tuesday’s event, held as part of an ongoing campaign led by Labour MPs, Compass, Citizens UK, The Co-Op and the Better Banking coalition, Steve added his voice to those calling on the government to support legislation which would put a cap on the total cost of credit that can be charged, give powers to local authorities to limit the number of credit agencies on high streets and widen provision of and access to affordable sources of credit through organisations such as local credit unions.
Steve has also put his name to an Early Day Motion which urges the Government to end legal loan sharking.
“The government has a duty to intervene in order to prevent the most vulnerable people in places like Liverpool Walton from being exploited. I – along with many other MPs, consumer groups and debt advice experts – am anxious to see decisive action taken,” he said.
The Department for Business, Innovation and Skills is currently undertaking a review into consumer credit and personal insolvency.