May 23 2013 Latest news:
Max Walters, Reporter
Thursday, September 20, 2012
High interest loan companies ‘can cause vulnerable residents to spiral into debt’
Profiteering loan companies targeting vulnerable residents in the borough have been attacked as part of a new crusade launched in Wembley last night.
The scheme, which is calling for greater regulation on various high interest loan companies, will lobby central government to impose tighter restrictions on them.
Politicians, including the leaders of both Brent and Camden council, were joined by community members at Chalkhill Community Centre, in Chalkhill Road last night to launch the campaign.
Cllr Michael Pavey, a Barnhill ward councillor, who helped organise the meeting, described ‘legal loan sharking’, as a huge problem in the borough.
He said: “From just door knocking or talking to residents there are many people who have highlighted it as a concern either for them or people they know.”
The loan companies, which have seen an increase in the borough, including in Kilburn High Road have been criticised for their extortionate interest rates.
Some credit companies are known to charge at an annual interest rates equivalent to more than 400%.
This is despite the Bank of England base rate being just 0.5%.
“The UK is unique in that there is no regulation on these types of organisations and vulnerable residents can spiral into debt with huge interest rates.” – said Cllr Pavey, who moved a motion condemning loan companies at this months full council meeting.
The scheme will now call for central government to impose tighter regulations on the practise and cap the amount a borrower will have to give back.
Stella Creasy, MP for Walthamstow and shadow minister for crime prevention was also at the event to launch a campaign calling on the Football Association (FA) to tighter regulate advertising of the loan companies.