News Articles For December 2002 - January 2003
Switzerland adopts statutory interest rate ceiling 22/01/03
A new Consumer Credit Act came into effect in Switzerland at the beginning of this year, and introduced with it a statutory limit on interest rates of just 15%. For further details click here. For background on the statutory interest rate debate in the U.K, try Henry Palmer's article printed in The Guardian in April of last year, by clicking here.
One in five can't access mainstream credit 13/01/03
A new report from Datamonitor claims that 7.8 million people are excluded from mainstream financial services, with many having to rely on loan sharks charging up to 500% APR.
The report identifies that the self employed and contract workers with irregular working patterns or
variable incomes find it hardest to access mainstream services - despite assurances from Government that
it would ensure the needs of the self employed were catered for.
Read the Guardian report here.
Anyone interested in buying the report from Datamonitor,
which includes in Chapter 6 a section entitled "Debt on our Doorstep: consumer groups come knocking for
non-standard lenders" can click here.
However, please be warned that the full report will set you back over $3,000.
MP's call for statutory interest rate limit 09/01/03
Colin Challen, Labour M.P for Morley and Rothwell, has launced an early day motion condemning extortionate
lending and calling on the Government to introduce a statutory interest rate ceiling.
The Early Day Motion can be accessed by clicking here.
Debt on our Doorstep is encouraging its supporters to write to their M.P and ask them to support the motion,
as well as the one tabled by John Battle M.P which has been a feature of our campaign since the lobby on 3rd December.
John Battle's motion now has over 100 signatories but we need to keep up the momentum for the campaign in
the run up to the launch of a DTI consultation paper on this matter, now expected in February.
The more signatories that both of these motions attract the better!
Debt on our Doorstep has learned that the consultation paper is now going to invite responses
on the question of whether or not the U.K should adopt a statutory limit for interest rates
as is presently done in other European countries.
Council Tax Suicide leads to questions in the Lords 16/12/02
The suicide of a Southwark man has been highlighted by Zacchaeus 2000 Trust and questions raised by Lord Morris
of Manchester concerning the enforcement of Council Tax. The suicide followed the receipt of letters threatening
enforcement of a debt by the local Council, and was originally reported in the Council Tax Ratings and Valuation
Reporter in October of this year. That report is now available here.
Mr. Watson, (not the deceased's real name)
was in receipt of Income Based Jobseekers Allowance but had received a bill for Council Tax as a result of an
administrative error. Lord Morris has now asked what steps the Government are taking to to ensure that errors of
this nature do not happen in future. However, Zacchaeus 2000 have pointed out that the level of Income Based JSA
bears no relation to the actual costs of living in the U.K as part of their campaign for Government to research
the actual costs of living and use this information to set a minimum income standard for the U.K as the basis for
benefit and minimum wage levels.
Campaign hits the news 9/12/02
Debt on our Doorstep's lobby and action day held on 3rd December has resulted in coverage for the campaign by
BBC News, Channel 4 News, the Financial Times, and Radio 4's Moneybox programme - amongst others.
Around 300 people attended the event with many lobbying their M.P's to sign Early Day Motion number 257 - laid down
in Parliament by John Battle, M.P, who also spoke at the event.
Ruth Kelly, the Financial Secretary to the Treasury, opened the event with a speech designed to promote a
dialogue between Debt on our Doorstep and the Government, and we will be looking for further opportunities to
follow this through. In the meantime, please write to your local M.P and ask them to support
John Battle's Early Day Motion which can be accessed here and check out some of the news coverage for
yourself by following the links below:
BBC Breakfast News
Radio 4 Moneybox programme
Money ripped out of estates 2/12/02
Today's Guardian highlights the way that door to door lending sucks money out of some of the poorest communities
in the U.K, making a mockery of the Government's attempts to regenerate neighbourhoods.
In the Meadowell estate on Tyneside, a survey by Debt on our Doorstep revealed that in just three streets 85% of
households were paying nearly a third of their weekly income to door to door companies. Between them the streets
are paying over £370,000 per year to money lenders.
One of the questions for the Government at the lobby tomorrow,
will be how it intends to build sustainable communities when so much money is simply flowing out of areas like
Meadowell and disappearing as profits for lenders. For the full story from the Guardian click here.
The story was also covered locally in Newcastle and can be viewed by clicking here.
No news is bad news 18/11/02
Five years after the Office of Fair Trading re-referred the case for improving regulation on extortionate lending to the Government (and 11 years after the original report), the Department of Trade and Industry has again fallen behind schedule with its review of the Consumer Credit Act. Whilst it has now established a number of dedicated web pages to keep people up to date with progress on the review, the Department of Trade and Industry has failed to keep on track with its promise to launch a consultation. Originally scheduled for Autumn of this year, there have been no further details published to tighten the extortionate credit provisions of the Act. In the meantime, profits for door to door lenders continue to rise. Provident's report for 2001 included:
- UK home credit profits of £150.376 million
- UK home credit customers of £1.61 million
- Average profit per customer of £93.40
