Legal Loan Sharks take advantage of those under financial strain

As the cuts start to bite, and job losses put household finances under strain, some disreputable credit companies are seeking to take advantage of people trying to make ends meet with payday loans charging interest rates of upto 4,000%.

Church Action on Poverty is campaigning on this issue as part of the Close the Gap campaign. Here's an extract from it's campaigning materials and a link for further information and action...

Since the recession hit, a third of families are now spending more each month than they have coming into their households. 4 in 10 Britons are worried about their debt, five million are permanently overdrawn, and 22% will carry a credit card debt throughout 2011. The payday lending industry is taking advantage of a lack of access to credit faced by many of these consumers as they try to make ends meet, lending them money on which they charge interest rates up to 4,000% or more.

The unchecked and unregulated practices of these companies are causing long-term financial damage to many across Britain. Other countries have introduced caps on the costs of credit which protect their citizens from these problems and encourage companies to lend responsibly. We are all too aware of the consequences of unregulated casino banking; let's not allow unchecked practices in the UK to destabilise our consumer credit market and bring poverty and hardship to our communities.

Two amendments have been tabled to a Finance Bill Parliament is currently debating, calling on the Government to review whether corporation tax or the bankers' levy could be used to deter high-cost credit companies from lending in a way in which is detrimental to consumers. This would be an effective way of tackling legal loan sharking and the problems caused by these companies' loans to thousands of
people in Britain.

To find out more and to email your MP to ask them to support the above amendments to the Finance Bill visit http://action.church-poverty.org.uk/ea-campaign/clientcampaign.do?ea.client.id=128&ea.campaign.id=10540