Tuesday, February 03, 2009

Putting Loan Sharks behind Bars

I came across this really excellent leaflet from Tower Hamlets Council Trading Standards while trying to put together a “financial inclusion” pack for all new residents.

Quite rightly progressives of all shapes and sizes get very “full on” about the serious issues of child poverty, crime and social exclusion. The community destroying and leaching activities of unauthorised loan sharks who prey on the poor and desperate is sometimes overlooked. We have comptletely vile gangsters who terrorise the vulnerable for debt repayment in many inner city estates and who do deserve long imprisonment for their crimes.

I am pleased that the local Council is trying to do something about them. Yes, send ‘em down, every one of them! But do not forget the far more widespread and “legal” culprits - the "door to door" collectors and the high street money shops.

They may not break your legs but they will charge up to 1845% pa (I say again if you think you have misread this – 1845% per annum! - Payday loans website - can you believe it this has gone up from January 2008 when it was “only” 1330% pa) for credit. The current Bank of England bank rate is 1.5%.

How can we tackle poverty when our very poorest estates pay this sort of money for credit? Credit unions and good consumer advice are key but the Government needs to outlaw such usury. There is no excuse for such interest rates. There should be a maximum rate for all personal loans.

6 comments:

Charlie Marks said...

Interesting this: apparently there's a high membership of credit unions in the US - and some states have limits on the interest rate charged on loans to members of the armed forces, etc.

I agree there's no point tackling the loan sharks if the legal ones aren't taken out, too.

John Gray said...

this is an interesting and uptodate web site - http://www.responsible-credit.net/ while here is a fairly recent British campaign http://www.doodnews.blogspot.com/

John Gray said...

and here
http://www.lotsanew.co.uk/index.php?option=com_content&task=blogcategory&id=10&Itemid=9

New specialist team for London set to put loan sharks behind bars
Illegal Money Lending (IML) team for London established Autumn 2007 to track down and prosecute illegal money lenders (loan sharks) in the capital
The IML team is part of LoTSA (London Trading Standards Authorities), the umbrella body which co-ordinates London wide Trading Standards campaigns.
The IML team will target and prosecute loan sharks identified by intelligence as causing the greatest damage to victims and their communities.

The IML team consists of a manager, investigators, a police officer, a financial inclusion officer, a victim support officer and other project staff.
The team will support all London borough Trading Standard’s departments through specialist investigations and technical support but the team’s initial efforts will be focused on Tower Hamlets, Newham and Hackney.
Victims of loan sharks will be helped by a specially employed Financial Inclusion Officer and Victim Support Officer, based at Toynbee Hall, East London. Victims will also be helped by Capitalise, London’s debt advice partnership which can help people manage existing debts. Capitalise has 59 debt adviser s working in partner organisations across London.
The launch of the public media campaign calling on victims to report illegal money lenders took place on Wednesday January 23rd at Toynbee Hall, Tower Hamlets.
Publicity to encourage members of the public to come forward with information includes advertisements inside buses, full page adverts in local authority newspapers and magazines and a radio advertisement campaign on Magic 105.4FM.

Anyone who has information about a loan shark should call 020 7364 6886, text ‘Shark Bait’ (+ your message) and send to 60003, or email: sharkbait@lotsa.org.uk This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Anonymous said...

Similar rates as those charged by the labour party's credit card then!

Samantha Peppercorn said...

I think these companies should be shut down, the interest rates are ridiculously high.

Samantha Peppercorn
payday loan

John Gray said...

Hi Sam

yes, and that includes your company!