MPs want to tackle legal loan sharking
July 9, 2011
In the current difficult financial and economic market a huge number of people have found themselves in dire straits in terms of their finances. With the cost of living rocketing due to soaring petrol costs, spiralling inflation, food price hikes, higher bills, and more, there are many people who have been struggling to make ends meet and many that have had to look at ways to bridge the gap between the amount that they have and the amount that they need.
Whilst some people have managed to turn to friends and family in order to get financial assistance there are some people, such as those with poor credit and low income families, who have turned to legal loan sharks. In fact, with the climate in a bad way loan sharks have been able to use the situation to their advantage by targeting those on low incomes and with bad credit, who they know will not get finance from other lenders.
MPs now want to crack down on these doorstep lenders and loan sharks who, whilst legal, are ripping off people that are already struggling by charging them a fortune in interest. A group of MPs wants to make the issue one that is faced and tackled because the extortionate rates being charged are putting many people in an even worse situation.
One MP said: ‘Ministers from both the Treasury and the Department for Business, Innovation and Skills have agreed with me in the past that the high-cost credit sector is a problem which needs to be addressed, but refuse to intervene in the market. With Moneysupermarket.com reporting a 58% spike in applications for payday loans in just one month, and with all the signs suggesting that high-cost credit is growing exponentially, it’s not good enough just to acknowledge the problem yet do nothing about it.’
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