Lewisham Council calls for action on pay day loan companies
12:00pm Sunday 30th September 2012 in News By
COUNCILLORS have called for an end to "legal loan sharks", vowing to promote local credit unions instead.
Lewisham Council discussed the rise of pay day loan companies which charge whopping interest rates at a meeting last week.
Councillor Mike Harris told the meeting he had been charged £20 interest after taking out a £100 loan.
He said: "These companies use aggressive marketing strategies. Local residents have told me that leaflets are handed out by loan sharks outside Lewisham's job centres whilst people collect their benefits."
Cabinet member for community services Councillor Susan Wise said: "Borrowing to pay off other debt is a clear sign that personal finance is out of control. Pay day loans are short term fix for some and they should not be seen as a solution for people with a genuine long term financial need."
The council pledged to promote credit unions in the borough - community-based organisations that offer access to affordable credit and promote savings.
Comments(3)
Marty1979
says...
5:49pm Sun 30 Sep 12
Virtual-Monster
says...
7:34am Mon 1 Oct 12
Interest charges are outlined clearly online, in the loan premises and as part of any written loan agreement.
If the loan is paid back almost immediately the interest charges are acceptable but delay in repayment can be very costly (2000% in some cases).
People have to take responsibility for the decisions they make. If you choose to take out one of these loans despite the raft of information about them, then you have to accept that you will pay a premium for the service and may find yourself trapped in a spiral of debt if you do not repay the loan promptly.
Credit Unions can help but they often have rules which make it impossible for first time approachers to take out a loan (Many CUs require you to pay in first and you can only borrow after a set period of time).
Options are limited for people on a low income, people who have a poor credit rating or individuals who need cash immediately without collateral.
This is an area the Government needs to explore fully and find a solution which avoids saddling the most needy in our society with debts which they are unlikely to be able to repay without creating great hardship and more poverty.
loansharks says...
5:24pm Sun 30 Sep 12
.co/petition-against
-loan-sharks/