Tag Archives: Stella Creasy

Government Lets Legal Loan Sharks Slip Through The Net Again says MP as FCA Dodges Credit Caps Question


Responding to the proposals outlined for consumer credit lenders in the Financial Conduct Authority’s rulebook, Stella Creasy MP again warned time was running out to tackle the problem legal loan sharks cause and called for Government to introduce a total cost cap on credit. Speaking about the proposals Stella said:

“Whilst I welcome the focus of the FCA on legal loan sharks and their research into capping, the lack of real action again today on the actual cost of credit itself will be a blow for many caught in a spiral of debt due to payday lenders. The FCA’s hands are being tied by a Government that consistently speaks out against what most other countries have done to tackle legal loan sharks by opposing capping what these companies can charge. With 80% of these loans for just putting food on the table, or a roof over their heads, we know people are borrowing for everyday essentials not luxuries. Price caps would make these loans more affordable and so less like to cause debt problems in themselves. The measures the FCA announced today may go some way to limiting some of the damage being done, but they won’t prevent them like capping would. The FCA today have said they don’t have the data from lenders to set a cap – and that’s why the Government must step in before April 2014 to make it a requirement for these companies to work with the FCA in setting a proportionate cap. That’s why Labour is committed to introducing a total cost cap- and why it’s wrong that the government keeps ruling it out.”

Commenting on the FCA proposals to limit rollovers Stella said:

“An OFT report into the industry has shown how only 11% of lenders assess the affordability of a loan the first time the loan is rolled over – with people using multiple lenders to pay off multiple loans, whilst a third of loans are repaid late or not repaid at all. Limiting rollovers within individual firms will do little to stop this payday tourism, as borrowers move from company to company taking out loans to cover existing ones.”

Commenting on plans to limit the ability of companies to use continuous payment authorities Stella said:

“It’s right that we reform how CPAs are used, but limiting the number of times they can be used doesn’t deal with the amount the firms are taking from bank accounts which is the real source of problems. Lord Freud says the Government is worried about companies exploiting universal credit payments to make sure they get their money – these proposals won’t prevent that, and if anything could make it more likely these firms will debit bank accounts early to ensure they get their fees. That ministers think the way in which money is taken is the problem- rather than the amount itself- shows how hopelessly out of touch they are on this issue.  Jo Swinson calls capping the ‘warm and fuzzy’ approach, failing to understand it’s the cost of credit itself which causes the problems in the first place to consumers.”

She continued to discuss the problems with the market:

“The case for change is overwhelming -legal loansharks are making profits of more than £1m a week as British consumers struggle with the rising cost of living. Report after report shows this industry is out of control – and the on-going investigation by the Competition Commission into the entire industry shows tinkering around the edges using rulebooks and guidance will do little to fundamentally overhaul this industry. For the past 3 years, the Office of Fair Trading, the Government and payday lenders themselves have all promised to take action on this industry following repeated warnings continually falling on deaf ears. Yet 3 years later, and every rule in the book still broken, legal loansharks continue to make 50% of their profits on loans rolled over or refinanced at least once and families are being forced to borrow for basics at rates of over 5,000%. Those who represent these lenders, such as the Consumer Finance Association, talk tough – claiming that the problem is just a few bad apples. Yet time and time again they refuse to debate with me the merits of making credit more affordable to prevent people getting into difficulty in the first place.”

Speaking about the Sharkstoppers’ campaign Stella said:

“The announcements today show just why Sharkstoppers’ campaigners fought to give the FCA the power to cap the cost of credit from April 2014 – so that the FCA could act to protect consumers and prevent debt problems. Yet without the support of Government to do this they are stuck, unable to really take on a litigious and aggressive industry which is protecting its profit margins. That’s why we are responding to the FCA’s consultation reaffirming our warning that without the FCA using its power to put a cap on the total cost of credit, legal loansharks will continue to be written blank cheques – making millions off hard-pressed Britons. Alongside a cap, the Centre for Responsible Credit and other organisations have called on the FCA to implement real-time credit checking across the industry – forcing companies to take responsibility for the lending they provide.

Only tough action by the FCA and the Government can stop the next 3 years being easy pickings for the legal loansharks – preventing people from getting into a damaging cycle of debt at the hands of these companies by giving them access to affordable credit, rather than just sitting by and trying to limit the damage they cause. British consumers deserve better – access to affordable and responsible credit, and action now can give them protections that others around the world enjoy. Lower levels of personal debt, lower levels of illegal lending and greater access to affordable credit. We can’t afford not to cap.”



1. The FCA published its proposals for consumer credit lenders in the Financial Conduct Authority rulebook – you can find out more about the proposals in full by visiting the FCA website.

–          The consultation closes on the 3rd December 2013 and you can take part by reading the proposal document by visiting the website.

–          Martin Wheatley from the FCA has said the regulator is looking at a total cost cap but currently does not have the market data to assess where to place the cap level.

2. The Office of Fair Trading launched its review into compliance with its responsible lending guidance in February 2012.

–          You can view the report in full by visiting the OFT website

–          Half (48%) of payday loan users have taken out credit that it turned out they couldn’t afford to repay

–          A third (29%) of payday loan users have taken out credit that they knew they couldn’t repay and in the last 12 months of 2012, more than half (57%) of people with payday loans missed a payment and incurred charges because of missed of bounced repayments.

–          The Office of Fair Trading referred the market to the CC for investigation in June this year. The CC is now carrying out its own comprehensive investigation, to see if there are any features of this market(s) which prevent, restrict or distort competition and, if so, what action might be taken to remedy them. For more information visit the competition commission website.

3. The Sharkstoppers campaign pack contains campaign ideas for making local communities legal loanshark free zones – It can be downloaded from Stella Creasy’s website and has been circulated to campaigners across the country. You can download the pack by clicking here 

4. Stella Creasy MP has been campaigning for caps on the cost of credit since 2010. You can find more details on her campaign hereFor more information visit Stella Creasy MP’s website at www.workingforwalthamstow.org.uk or call Jon Chambers on 020 8521 1223.

Wonga May Be Celebrating but Legal Loan Sharks’ Profits Come at a Heavy Cost to Our Country

shark1-290x290Whilst many businesses struggle to survive in our fragile economy, payday lender Wonga is one of our few home grown success stories. Today they announced they are making more than £1m a week in profit- a 36% increase on last year. No one could begrudge a company that works hard to serve their customers and is rewarded for it. But money made in this industry comes at a heavy cost to our country. Evidence of just how exploitative this business is has led the Office of Fair Trading to refer the entire payday lending industry to the Competition Commission. Despite repeated warnings, the Government refuses to cap what can be charged for credit and so protect consumers from the debt these loans can bring. As such legal loan shark companies thrive, Wonga’s success says more about where our country is going wrong than right.

Payday lending has become the norm for millions as they try to manage having too much month at the end of their money. 80% of loans are for basics; Britons are putting their rents, mortgages, travel costs, food and heating bills on the tick to get through the week. Not everyone who borrows from these firms gets into financial trouble, but enough do as a result of the terms of the loan that such mega profits are achievable even in times of economic difficulty. Their customers know how costly this credit is- 40% of those who took out a payday loan say it made their financial position worse. But many feel they have little alternative. Research by Which? shows half of all borrowers who have taken out a payday loan have borrowed credit they couldn’t repay – with 57% having missed a payment and a quarter using it to pay off other forms of credit.

The damage these firms are doing to our country is not just to be seen today – it is destructive to our tomorrow as well. Whether investing in property, education or saving for old age, many are saddled with a level of personal debt that makes forward planning impossible.  Families living under the shadow of £10,000 or more of unsecured debt cannot hope to offer their children the chances of their counterparts, nor cope with the costs of caring for their elders with dignity. Debt doesn’t just harm everyday finances, it narrows horizons too.

For three years many have been trying to warn the Government they needed to protect consumers from this, calling for Britain to follow the lead of most other countries in introducing a cap on the cost of credit. Such caps help limit the price of any loan, so breaking the cycle of debt borrowing in this way can create. Now as debt engulfs the household budgets of so many, we see the consequences of the Government’s choice not to act. In the last four years the Citizens Advice service has seen a ten-fold increase in the proportion of clients seeking help with multiple bills that included payday loan debt. There is every sign these problems are getting worse not better. Half of all adults, just over 20 million people, say they are now worried about their current level of debt, an increase from 42% earlier this year.

The Government’s failure to address Britain’s access to affordable credit in these straightened times and so reform our consumer credit market is not just failing families. It is feeding the legal loan sharks. Despite report after report showing how toxic their practices are, the Government continues to let such firms self regulate. It is a strategy as effective as letting turkeys organise Christmas. A Citizens Advice survey showed payday lenders are breaking twelve of the fourteen promises they made in their own Good Practice Customer Charters. Indeed, the suggestion of any action by the OFT has led to one firm to moan they could lose £10m in profits because they would be expected to “lend more responsibly”.

Reform would be welcomed by cash strapped Brits – 93% of the public believe changes are needed in order to protect consumers from payday lenders and 65% support a cap on the total cost of credit. Instead of listening to the people, today’s announcement shows how the coalition is actually making Britain the place for these firms to do business. Wonga may be celebrating today, but it is our nation’s families and our nation’s financial future that will pay the price of the Government’s failure to end legal loan sharking.


Statement from Stella Creasy MP on warnings issued to Whipps Cross

whippsResponding to the decision of the Care Quality Commission to issue warnings to Whipps Cross Hospital over the care provided to patients local MP Stella Creasy said;

“Residents in Walthamstow will be understandably concerned by the CQC’s actions and the warnings issued to Whipps Cross about the standards of care. Their expert assessment serves to reinforce some of the issues a number of organisations and residents have been raising and which I have sought to address with them in recent months. Given this, I therefore do not doubt both the severity of the warnings the CQC have issued and the need to hold to account the leadership of Barts Trust on the commitments they have made to me to tackle these problems.

Indeed as a result of these previous concerns I had already arranged a discussion on the provision of care for our elderly residents. Along with other local MPs I will now seek to broaden this discussion to cover how Barts intend to address all the issues the CQC have raised- I hope in turn the Government will support our community in this process so that it is the needs of patients that determine the action taken first and foremost. we must not lose this opportunity to ensure care at Whipps is improved to the standard and quality Walthamstow both needs and deserves. ”

For more information you can read the full CQC statement at their website.

#7days4stow groups come together to build for next six months

6The #7days4Stow project continues to gather momentum as it heads into its second sixth months. Members from eight of the projects involved in the campaign met on the night of Tuesday 23rd July to discuss ways to develop and support actions both within their individual group, and across the project as a whole. Each group were challenged to come up with a coherent agenda, stating their purpose, the context in which the group had formed, as well as the process by which they aimed to achieve their goals. As an introduction to the evening, each group updated each other on their progress and began to map out the next step for each group.

As part of the evening, each group was asked to complete their section of a project planning grid. This grid aims to map out an overview of what each project is aiming to achieve up to the next planning meeting. Putting together their list of actions and aims, each group was challenged to be very pragmatic and specific with their goals. Generally, the upcoming project and coordinator actions tended to parallel with each other. Common themes identified included:

  • The need to increase communication and co-ordination, both within and between groups;
  • Greater promotion of events within each group, and stronger collaboration between different #7days4Stow projects.
  • Reaching out to the Waltham Forest community to understand the main issues that need to be addressed.
  • Introducing novel means of communication to increase the publicity of different groups – including IVO, videos, posters, social media sites, and advertisements.
  • Coordination of meetings with outside bodies and community groups, and booking of venues for events.
  • The need to attract the necessary funding and workforce.

The two main themes tended to revolve around co-ordination and communication. It was agreed that co-ordination within any project required an overarching understanding of the #7days4Stow project, a mechanism for facilitating the movement of volunteers, as well as the need to take a lead role in the organisation of venue bookings for group events.

The key element of the communications discussion revolved around placing advertisements for actions and volunteers on IVO, the volunteer website detailing the specific jobs required across any #7days4Stow group, and the contact details of the relevant project manager. The evening was a real success with each group optimistic about what they can achieve in the next 6 months of the project as well as coordinating the direction for the future of their respective projects, and the #7days4Stow project.


To view a refined copy of the action plan of each group, please click into the #7days4Stow grid

Alternatively, you can view a comprehensive action plan from each group

For more information on the #7days4Stow project, either:



MP welcomes Archbishops call to take on the legal loan sharks

shark1-290x290Responding to comments by the Archbishop of Canterbury about giving consumers alternatives to payday lenders who target vulnerable borrowers with excessive rates of interest and charges, Stella Creasy MP said;

“I’m pleased The Most Rev Justin Welby has reaffirmed the Church’s commitment to fighting the damage legal loansharks are doing to Britain and supporting the credit union movement to give people a fair alternative. Research out today from the University of Birmingham shows just how tough it is for people to save for a rainy day – with 1 in 5 needing to turn to borrowing to cover any unexpected costs – leaving British families vulnerable to payday lenders. With 18 legal loansharks on my high-street in Walthamstow alone, versus one credit union – we know all too well that our communities find themselves at the rough end of an unfair fight.

With millions of pounds at their fingertips to advertise and promote themselves, the payday lending companies that are taking over our high streets can’t be beaten on competition alone. The Archbishop has been an ardent campaigner and friend of the Sharkstoppers campaign in showing that there is no excuse for the Government not to act to bring an end to legal loansharking in Britain. Together with Lords from across all-sides of the House earlier this year, the Archbishop’s support in calling for the Financial Conduct Authority to have the power to cap the cost of credit was instrumental in forcing the Government to finally accept this measure in the Financial Services Bill. Yet we now know it could take two years for the FCA to consider using such a power – whilst legal loansharks continue to prey on our communities as finances remain tough for families.

That’s why we’re focused on fighting for the Government and Financial Conduct Authority to use their powers and cap the cost of credit and protect our consumers from the damage this toxic type of lending can do now. Osur communities and credit unions deserve a fair fight when it comes to giving consumers a fair deal – we’re also calling for a moratorium on payday lending advertising and promotion until after a Competition Commission review reports. There is no excuse for the Government not to act now to end legal loan sharking in Britain- our communities, our credit unions and our consumers deserve it.”

MP urges comedians to make legal loansharks No Laughing Matter as Birmingham research shows 1 in 5 have no rainy day cash

shark1-290x290For immediate release : Thursday 25 July 2013 01.00am 

Responding to figures released today by researchers at the University of Birmingham on levels of personal financial distress Stella Creasy MP said;

“When one in five Brits would have to borrow if they needed £200 for an emergency like a broken washing machine or car, it is no surprise so many are also considering taking out a payday loan in the next year. That’s why we’re redoubling our efforts to call on the Government, and the new Financial Conduct Authority to use their powers and cap the cost of credit and protect our consumers from the damage this toxic type of lending can do. As families continue to struggle with rising living costs, it is no surprise this research shows just how hard it is for people to save for a rainy day to cope with unexpected costs and so how vulnerable they are to such companies. That’s why there is no excuse for the Government not to act now to end legal loan sharking in Britain.”

As part of the sharkstoppers campaign, Stella Creasy revealed today comedians and celebrities are being urged to help the fight against legal loan sharking by pledging not to work with payday loan companies as either voiceover artists or spokespeople until a cap on the cost of credit is introduced. Speaking about this Stella said:

As the Competition Commission investigates the whole of the payday lending industry for malpractice, we are calling on everyone to join us creating a moratorium on payday loan advertising and promotion until after it finishes its work. As part of this we are asking comedians and celebrities to pledge not to promote these companies until there is reform- we’ve seen how these companies use such individuals to try to make themselves appear respectable and loveable  In standing up to these companies with us they can help us tell the truth about these firms and so make a real difference by saying the debts these companies cause are no laughing matter. ”

The call for action from comedians comes in the same week that several local councils have taken action to remove the promotion of these companies from public spaces. This includes Plymouth Council which has removed payday lending advertising from billboards and car parks as well as Edinburgh, Waltham Forest and Haringey Councils in London who have blocked payday loan websites from the council’s computers in libraries and public buildings. Throughout the rest of 2013 the Sharkstoppers campaigners will be targeting a range of individuals and organisations to help make Britain a legal loanshark free zone following the Government’s failure to cap the cost of credit.



  •  The University of Birmingham’s research showed that whilst a quarter (24 per cent) of borrowing households owed less than £1,000 on unsecured credit, more than a quarter (28 per cent) owed in excess of £10,000 in 2008–9. People have very little capacity to meet unexpected expenses, even relatively small ones. About one in five of the population said they would have to borrow money if they needed £200 at short notice. Only two in five said they would be able to find £200 without cutting back on essentials or dipping into savings.
  • In data released by R3, there has been an increase in the number of adults who are worried about their debts with half of GB adults, equating to just over 20 million people, say that they are worried about their current level of debt, an increase from 42% in February this year. One in five adults say that they are very or extremely worried about their current level of debt, up from one in ten in early 2013. Of those adults worried about their current level of debt, 10% say that they are worried about debt from payday or other short-term, high interest loans. The highest concern about payday or other short-term, high interest loans is evident amongst 18 to 24 year olds. Of those within this generation who are worried about their debts, one in five (19%) say that they are worried about payday or other short-term loan debt, up from 8% in February and almost matching the highest levels of concern seen in this age group in July and October 2011.
  • For more information on the research by R3 contact Nick Cosgrove by email or on 020 7566 4215 or visit the R3 website at www.r3.org.uk
  • The Sharkstoppers campaign pack contains campaign ideas for making local communities legal loanshark free zones – offering materials to help lead action to kick out advertising from sports grounds, shopping centres and university campuses as well as asking celebrities to make sure they don’t sign up to promote payday lenders on our TV sets and promote debt advice and affordable credit within localities. It can be downloaded from Stella Creasy’s website and has been circulated to campaigners across the country. You can download the pack by clicking here .
  • Stella Creasy MP has been campaigning for caps on the cost of credit since 2010. You can find more details on her campaign hereFor more details on the #Sharkstoppers campaign to tackle legal loan sharking in the UK visit Stella Creasy MP’s website www.workingforwalthamstow.org.uk ; or call Jon Chambers on 020 8521 1223 or 07964 400 914.

Download: #Sharkstoppers 2013 Local Campaign Pack

This campaign pack is designed to give you lots of ideas as to how you could take this message out into our communities – whether through council groups, working with credit unions, supporting debt advice services, online or even through your local football club!

We hope this pack and the case studies it contains will give you some ideas for what you could do. If you do organise something in your area please do let us know so we can share it with others in this campaign too! Let’s make 2013/14 the year we all stand together to call for an end to legal loansharking in our communities and our country.

Download the pack here.