Curb the Credit Sharks Campaign
13th February 2005

The Sunday Mirror and Debt on our Doorstep have teamed up to launch the "Curb the Credit Sharks Campaign" to increase pressure on the Government to cap interest rate charges on credit cards, store cards and door to door lenders. The campaign has been launched following Provident Financial's decision to roll out it's Vanquis Credit Card - which charges a disgraceful 69% in interest to low income borrowers.

Damon Gibbons, Chair of Debt on our Doorstep commented "The fact that Vanquis can charge this rate is a national disgrace. This could not happen in Germany, France, Italy, Switzerland, and Holland - to name a few countries that have systems of interest rate capping. The timing of the launch of the Vanquis card shows just how little rip-off lenders in the UK think the Government's proposed Consumer Credit Bill will affect their ability to make obscene profits at the expense of the poor.

The Campaign made an immediate call for an interest rate ceiling of 30% (25% above the Bank of England Base Rate) to be implemented for credit cards and of 80% for all home collected loans over £500.

Debt on our Doorstep considers that this level of cap is realistic in the current market and would not result in lenders withdrawing from offering credit.

"The simple truth is that the Government doesn't know what the effect of such a cap would be at that level" Gibbons continued, "because it failed to properly conduct research into this issue last year. In letters to Debt on our Doorstep, the DTI admit that they didn't look in detail at what would happen at different capping levels. They are trying to make policy in the dark."

In a recent statement in the House of Commons the Minister stated that he didn't want to place a duty on the Office of Fair Trading to collect details of the rates being charged at the moment because that would cost too much. But that is exactly what they do in virtually every other major European economy. Why isn't this Government interested in finding out the truth about rip-off lending in the U.K?"

The Curb the Credit Sharks Campaign also calls for an end to reckless lending. At the very least there should be a requirement for lenders to know the financial circumstances of the borrower and be confident that they are able to make the repayments. To ensure that this is the case, the Campaign calls for credit information on all loans, from whichever lender, to be shared via credit reference agencies. If companies make no efforts to find out, or fail to take account of repayment problems, then the loan should not enforceable.

Debt on our Doorstep also supports the Campaign's call for financial literacy to be made compulsory within the national curriculum and for proper resourcing of financial literacy programmes and money advice services from central Government, paid for via a levy on the credit industry.

For too long advice services, and more recently financial literacy programmes have been reliant on hand-outs from big banks and lenders with their own agendas to push. This potentially compromises the independence of advice services, and at the same time, the level of funding from the credit industry has been pitiful in comparison with the profits that they make. A statutory levy on the industry - or windfall tax - is the best option for long term funding of these services.

The Sunday Mirror is collating evidence on behalf of the "Curb the Sharks Campaign" and wishes to hear from people who have found themselves in debt and subject to excessive charges. Call 020 7923 3253 from 10am to 6pm (they'll call you back if you leave a message) or e-mail debt@sundaymirror.co.uk

Make the most of this week's Parliamentary recess by contacting your M.P in their constituency and asking them to support the campaign.