Ministers pump £800k into hunting down illegal loan sharks preying on the most vulnerable
And £100,000 of money that was seized from the dodgy firms will be spent to encourage vulnerable Brits to join a credit union instead of turning to high-cost credit
LOW-LIFE crooks illegally taking cash from vulnerable Brits will face a fresh crackdown, ministers have announced.
An extra £800,000 of cash will be made available to help fund the fight against loan sharks, and more to help Brits find safer ways to borrow money.
A total of £5.6million will be given to Britain's Illegal Money Lending Teams to tackle nasty illegal lenders who prey on poor and vulnerable Brits in our society.
An extra £100,000 of money that was seized from them will be spent on encouraging people at risk of being targeted to join credit unions instead of turning to high-cost credit.
This will help hard-up Brits get their lives back on track in a safer way and keep them away from companies selling money at dangerously high interest rates.
Ministers estimate that around 300,000 households are in debt to illegal money lenders.
John Glen, Economic Secretary to the Treasury said today: "These nasty lenders are nothing more than lowlife crooks taking hard-earned cash from the pockets of the most vulnerable. Over 300,000 people are in debt to illegal money lenders in the Britain and they need to know that we’re on their side.
"That’s why we’re taking the fight to the loan sharks and spending more than ever to support their victims.”
The news is a boost for The Sun's campaign to cap the total cost of high cost credit being sold through doorstep loans and rent-to-own products.
Some 7million households turned to high-cost credit such as doorstep lenders or rent-to-own firms last year.
Last night MPs called on ministers to extend the cap on payday loans to other forms of high-cost credit too, such as credit cards.
Stella Creasy accused the high-cost credit industry of "preying" on Brits who are on insecure incomes and pleaded with ministers to "learn the lessons" of the payday loans cap and apply it to other products, which is exactly what
Why we want to Stop The Credit Rip-Off
WE never want you to pay more than double the amount you've borrowed - whether it's for a new sofa or a loan to help pay your bills.
That's why The Sun has launched a campaign calling for a cap on the total cost of rent-to-own loans and doorstep lending at double the original price or loan amount.
A similar cap was introduced for payday loans in 2015 and since then the number of people struggling with unmanageable debts to those lenders has more than halved, according to Citizens Advice.
People on the lowest incomes, living in the poorest places, are paying a poverty premium - up to 7million people have resorted to high-cost credit, according to the Department for Work and Pensions.
People whose wages or benefits don't stretch far enough need to borrow from rent-to-own or doorstep lenders to help pay for things such as an unexpected bill or to furnish their homes.
These come with exorbitant rates of interest - more than 1,500 per cent in some cases of doorstep lending.
It is scandalous that one mum who borrowed cash to help keep a roof over her family's head ended up paying back over THREE times the original amount.
It's time to stop the credit rip-off.
Here's what we demand:
Rent-to-own
- Cap on all repayable costs at double the item list prices (including fees, add-ons and interest)
- Ban on incentives for all sales staff
- Ban on discounts for existing customers to tempt them into more credit
- Companies to publish example interest rates and costs on all payment options
Doorstep lending
- Cap at double the original amount borrowed
- Stricter affordability checks
- Ban on discounts for existing customers to tempt them into more credit
It's time to Stop the Credit Rip-off.
And today's news comes as it is revealed that 380 prosecutions have been made against illegal loan sharks since the body was set up in 2004.
They have written off £73million worth of illegal debt, helping 28,000 people escape the jaws of loan sharks.
Peter Tutton, Head of Policy at StepChange Debt Charity, welcomed today's news.
He said: "Cracking down on the unconscionable activities of loan sharks is a very welcome step. It needs to be accompanied by a twin-track focus on the high cost credit market more generally, to reduce the harm being experienced by vast numbers of households who are forced to borrow to make ends meet.
"Now is the time for the Government to explore creative, sustainable alternatives to meet the needs of financially vulnerable households."
MOST READ IN POLITICS
And Tony Quigley, Head of the England Illegal Money Lending Team, added: "Loan sharks are a blight on society and prey on vulnerable people who struggle to make ends meet.
"These criminals use callous methods to enforce repayment and victims are often subjected to threats, intimidation and violence.
"We will not tolerate this sort of criminal activity in our country and loan sharks who are caught flouting the law will be pursued and prosecuted."
He went on: "It is important for people to realise that alternatives to borrowing from loan sharks are available if you are in financial difficulty.
"Loan sharks are never the answer and we strongly support credit unions who can provide a safe and legal alternative.
"If you have been affected by illegal money lending, please call our confidential hotline on 0300 555 2222."