Nottingham has the lowest household disposable income of anywhere in the UK. The average income per household after tax, but including benefits, is £16,034 a year. In Nottingham it is £10,834.
The Meadows estate on the edge of Nottingham and on On an estate such as the Meadows, a loan shark is everybody's friend.
Sharon Mills, of the Meadows Partnership Trust, explains why. "If you are desperate, and the kids have not eaten for three days, if a person comes to the door offering a loan, they'll seem like the Messiah," she says. But she also describes them as "a pack of wolves", who can resort to intimidation to get their money back. "They know when your payday is. They they'll come and kick the door in. It can be that, literally."
The Office of Fair Trading, which is responsible for regulating the UK's payday lenders has been "ineffective" and "timid", and has failed to identify risks of malpractice which have cost consumers at least £450m a year, according to Parliment’s Public Accounts Committee (PAC).
It had failed to invest enough in regulation, had never fined a firm for bad practice, was too slow to revoke credit licences, and on the occasions it did take licences away it failed to stop unscrupulous lenders restarting under different names, the committee of MPs said.
Some consumers have seen small debts spiral out of control as a result of late payment fees, roll-over loans and interest rates often in excess of 4,000% a year. The report called for the cost of borrowing to be expressed as a total amount repayable rather than an annual percentage rate, saying this was outdated and misleading to borrowers taking loans for less than 12 months.
"Some of these lenders use predatory techniques to target vulnerable people on low incomes, encouraging them to take out loans which when rolled over with extra interest rapidly become out of control debts," the committee's chair, Margaret Hodge, said. "Meanwhile, the OFT has been ineffective and timid in the extreme. It passively waits for complaints from consumers before acting."
Richard Lloyd, executive director of the consumer group Which?, said the report should serve as a final warning to lenders. "This is a damning verdict on the credit market and the OFT's failure in the past to step in and protect consumers. It underlines once more why a crackdown is urgently needed to tackle unscrupulous high-cost lenders,"
The Meadows estate on the edge of Nottingham and on On an estate such as the Meadows, a loan shark is everybody's friend.
Sharon Mills, of the Meadows Partnership Trust, explains why. "If you are desperate, and the kids have not eaten for three days, if a person comes to the door offering a loan, they'll seem like the Messiah," she says. But she also describes them as "a pack of wolves", who can resort to intimidation to get their money back. "They know when your payday is. They they'll come and kick the door in. It can be that, literally."
The Office of Fair Trading, which is responsible for regulating the UK's payday lenders has been "ineffective" and "timid", and has failed to identify risks of malpractice which have cost consumers at least £450m a year, according to Parliment’s Public Accounts Committee (PAC).
It had failed to invest enough in regulation, had never fined a firm for bad practice, was too slow to revoke credit licences, and on the occasions it did take licences away it failed to stop unscrupulous lenders restarting under different names, the committee of MPs said.
Some consumers have seen small debts spiral out of control as a result of late payment fees, roll-over loans and interest rates often in excess of 4,000% a year. The report called for the cost of borrowing to be expressed as a total amount repayable rather than an annual percentage rate, saying this was outdated and misleading to borrowers taking loans for less than 12 months.
"Some of these lenders use predatory techniques to target vulnerable people on low incomes, encouraging them to take out loans which when rolled over with extra interest rapidly become out of control debts," the committee's chair, Margaret Hodge, said. "Meanwhile, the OFT has been ineffective and timid in the extreme. It passively waits for complaints from consumers before acting."
Richard Lloyd, executive director of the consumer group Which?, said the report should serve as a final warning to lenders. "This is a damning verdict on the credit market and the OFT's failure in the past to step in and protect consumers. It underlines once more why a crackdown is urgently needed to tackle unscrupulous high-cost lenders,"
No comments:
Post a Comment