Today Ian voted yes to supporting the introduction of a series of caps on the amount that payday and home credit lenders can charge for credit. The motion has gained widespread cross-party support from MPs who recognise that the Government has a duty to intervene in the high-cost credit market, which is often uncompetitive and exploitative.
Currently lenders can charge any price for credit which means some loan and credit companies charge £82 for every £100 lent. Annual interest rate charges of over 2500% are also now common (despite the Bank of England base rate being just 0.5%). Borrowing at these rates repeatedly tips customers into inescapable cycles of debt and poverty. According to the OFT £16,000 of excess profit is made every hour in this sector.
Ian said, “Communities across Britain, including my own constituency of Edinburgh South, are being targeted by unscrupulous lenders who are legally allowed to charge whatever they want for credit. The case for introducing caps on the total cost of credit is now unanswerable – that’s why I voted to support the introduction of caps in Parliament today”.
Joe Cox, Campaigns Organiser for the End Legal Loan Sharking Campaign said: ” I am delighted that [MP’s name] has voted to end legal loan sharking. Credit and loan companies are legally allowed to charge whatever they like for lending money. Door to door lenders are now charging £83 for every £100 borrowed, whilst some online pay day lenders charge a whopping 3000% APR. Now is the time to protect the most vulnerable by capping the cost of consumer credit”