White paper fails the poor
8th December 2003

Government ducks decision on extortionate lending

The Government today published its long awaited White paper on consumer credit reform. But in spite of having recently commissioned research into the operation of interest rate caps in the rest of Europe, the Government has again failed to provide proposals that would effectively tackle extortionate lending here in the U.K.

In spite of mounting evidence that vulnerable customers are being ripped off by legal moneylenders frequently charging interest rates in excess of 200%apr, the Consumer Credit White Paper has not included a commitment to cap excessive interest rates.

Niall Cooper, national coordinator of Church Action on Poverty, and chair of Debt on our Doorstep said:

"By failing to come out in favour of an interest rate cap, the Government has yet again caved in to scaremongering from the consumer credit industry. How it is possible to crack down on extortionate lending without some kind of ceiling on what moneylenders can legally charge defeats me."

"The White Paper published today trots out the same old arguments against a ceiling on interest rates which the consumer credit industry has been peddling for years. People in poverty will not thank the Government for failing to protect them from extortionate and unscrupulous doorstep lenders."

Only this week, North East Derbyshire Citizens Advice Bureau has highlighted the case of a doorstep lender charging an astonishing 440%apr interest rate.

"The Government must come off the fence and legislate to say whether it is acceptable for moneylenders to charge such extortionate interest rates or not. By failing to do so, they are failing some of the poorest and most vulnerable members of society."