MP backs credit clampdown campaign

Want to buy this photo?

Jim Dobbin MP

MP for Middleton and Heywood, Jim Dobbin has joined with numerous citizens groups, campaigners, MPs and celebrities who have called on the government to end legal loan sharking.

Currently lenders can charge any price for credit which means some loan and credit companies charge £82 for every £100 lent. Annual interest rate charges of over 2500% are also now common. Borrowing at these rates repeatedly tips customers into inescapable cycles of debt and poverty.

The new campaign, led by the Compass pressure group, is calling on the government to ban excessive prices for credit and provide alternative sources of credit through CDFIs, credit unions and a post bank.

Jim Dobbin MP said: “The law must be changed to stop this exploitation. When so many people are suffering the effects of the global recession with the accompanying job losses it’s time to take action and outlaw this system which increases the misery of those people who are forced to borrow to keep their heads above water.” 

Gavin Hayes, General Secretary of Compass said: "As we pack our flexible friends to take away on holiday it is now becoming clear that more and more of us are also using credit to make ends meet. Yet credit and loan companies are legally allowed to charge whatever they like for borrowing money.

"Door to door lenders are now charging £83 for every £100 borrowed, whilst some online pay day lenders charge a whopping 3000% APR. This is legal loan sharking, a national scandal which must come to an end. Now is the time for caps on all consumer credit and real affordable alternatives through a post bank."

The government has pledged to clampdown on interest rates for credit and store cards and the campaign believes it should do the same for the high cost credit market.

Thousands of people across Britain are expected to sign an online petition on a brand new interactive website at www.endleagalloansharks.org.uk

The campaign will be targeting millions of people across Britain through using social networking sites such as Twitter and Facebook.