All next week the national press will reveal just how many people’s lives are now being ruined by legal loan sharks in Britain. I’m asking you for help to change this by emailing Lords and Baronnesses to vote for powers to cap their charges this month.
At the end of November, the House of Lords will vote on an amendment tabled by Lord Mitchell to Clause 28 of the Financial Services Bill that will allow the new regulator to cap what these firms can charge. It’s a chance to limit the damage high cost credit companies can do by giving British consumers the same protection that others all over the world enjoy.
New research shows 60% of those using payday loans are using the money to pay for household bills and buy essentials like food, nappies and petrol. With over 50% admitting that they took out these loans despite knowing they could not afford to pay back, capping what these companies can charge could make a real difference to millions across the country borrowing just to make ends meet, and now facing the costs of Christmas.
Please contact members of the House of Lords to ask them to support this amendment. You can find a suggested email text to use and details of their email addresses here. There are 812 members of the Lords and we want to ensure they all know how strongly Britain wants this change – we have less than three weeks to ask them to take this chance to end legal loan sharking in the UK!
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 28 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.
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.