On Tuesday it was revealed 1 in 10 payday loan users are foregoing food in order to pay back their debts. Thanks to your campaigning so far, I’m delighted to say that Labour have now announced they will vote yes to a proposal to cap what these firms can charge that will be debated in the House of Lords in two weeks time.
With 5 million Britons now turning to legal loan sharks to make ends meet we want to now target those who have yet to declare their intentions. These are the Conservative, Liberal Democrat, ‘Crossbenchers’ Lords (who do not represent any political party) and Bishops who can also all take part in the vote on the Mitchell amendment to the Financial Services Bill.
To help ensure they are all contacted we are dividing up this task amongst campaigners. If you would like contact details for 10 suggested representatives to email drop me an email by clicking here. I’ve reprinted below the suggested text to send to them – if you receive a positive response please do also let us know. Any contact you make with Lords helps us show the strength of feeling amongst the public on this issue to them and we are very grateful for your help!
It has also become clear this week that despite the widespread evidence of the problems these companies are causing millions in Britain, the Government won’t consider regulating these companies for another year. Listen to this interview from the Today programme to hear the complacency of these companies about the problems they cause- this amendment in the House of Lords is our best chance to change the Government’s approach and push them to act to regulate this industry.
We have just two weeks left to win the argument with the rest of the Lords so if you can spare 10 minutes to email 10 of them you could be part of helping to end legal loan sharking!
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Text to use to write to members of the House of Lords
House of Lords,
Dear Lord/ Baronness XXXX,
I’m writing to ask you to vote for the pay day loan amendment tabled by Lord Mitchell to Clause 98 of the Financial Services Bill designed to help tackle legal loan sharking when it comes before you at the end of November 2012.
Whilst every other industry has suffered from the recession, legal loan sharks are making huge profits off the back of lending to people at excessive rates of interest – some of up to and over 16,000%. Fines alone will do little to change the way they operate – one firm this year made £45m in pure profit and its main director took home a salary of £1.6m.
Giving the new regulator explicit powers to cap the charges that these companies can set would send a strong message to this industry about the costs for loans that should be considered acceptable. British consumers deserve the same protection from these companies that others around the world enjoy. Research shows 60% of those using payday loans were using the money to pay for household bills and buying essentials like food, nappies and petrol. By restricting what firms can charge, we could make a real difference to millions of families across the country right now who are struggling financially and are borrowing from these companies just to make ends meet. Just recently it was revealed 1 in 10 payday loan customers are going without food in order to be able to pay back their debts- with 5 million Brits now turning to payday loans it is vital to act quickly to prevent a personal debt crisis in our country.
A poll by ComRes for R3, the insolvency practitioners, shows overwhelming public support for action on this issue with 93% agreeing there is a problem with payday lending and 65% supporting a cap on the total cost of credit. Ministers claim they support the spirit of the amendment but refuse to back it – legal advisors are clear that without explicit powers to act, these companies will be able to challenge any regulatory action in the courts.
Please don’t let the ﬁght against legal loan sharking become a fee generating opportunity for lawyers – please vote for this amendment and help end legal loan sharking in Britain.