A group of MPs has signed a House of Commons motion calling for caps to be placed on the level of interest lenders can charge, amid concerns that indi…
A group of MPs has signed a House of Commons motion calling for caps to be placed on the level of interest lenders can charge, amid concerns that individuals could face very severe debt problems due to so-called legal loan sharks.
It was sponsored jointly by Labour MP for Walthamstow Stella Creasey and Swindon North Conservative member Justin Tomlinson, the Guardian reports.
Those who have signed it include former Labour leadership contender David Miliband.
Ms Creasey told the paper: “People who are shut out of mainstream credit are sitting ducks for these companies. There are so few of them dominating the market that there’s no proper competition.”
Attention has been focused on lenders such as Wonga, who charge over 2,600 per cent for a payday loan, although its television adverts do carry text stating these are short-term arrangements and not designed for long-term borrowing.
Ms Creasey recently joined in criticism of the decision by London mayor Boris Johnson to permit Wonga to sponsor the free public transport on offer in the capital on New Year’s Eve, a move Mr Johnson had defended as the company is a lawful one.
She said the firm had written to her opposing her support for legislation to stop such lending practices.
Mr Tomlinson has also been active in dealing with debt, joining with fellow Tory MP for neighbouring Swindon South Robert Buckland in organising a seminar last month to help advise people on where to get advice on debt management and dealing with financial problems.
By James Francis