MP’s To Vote On Legal Loan Sharks June 28th, 2011
There have been growing concerns in recent years over the large increase in the number of doorstep lenders and pay day loan companies who are now operating in the UK and the high rates of interest which are charged on the loans they offer.
For the majority of people in the UK who want an unsecured loan, their local bank, or reputable loan company will be the first place they will look. However, with lenders tightening their criteria on unsecured loans and restricting who they are prepared to lend to, more and more borrowers are becoming more desperate for a loan and being forced to use these expensive alternative providers.
Doorstep lenders and pay day loan companies have been dubbed “legal loan sharks” by many finance industry experts, who want to see restrictions placed on this type of loan.
These types of loan are often taken out by the more vulnerable members of society, who would not manage to get a loan through more traditional routes and there is currently no regulation in place to ensure these lenders provide good advice and a good service to their customers.
Today (Tuesday 28th June), MP’s will vote on an amendment to the finance bill, which could introduce new legislation to govern the sale of pay day loans and restrict doorstep lenders, or at least ensure that borrowers fully understand the loan they are taking out and have more protection.
The Nationwide building society is just one organisation which is supporting tighter controls over this type of loan company. Graeme Hughes of the Nationwide said “Nationwide is encouraging greater scrutiny into the high cost lending practices of legal loan sharks to ensure transparency and the protection of consumers.”
“These vulnerable consumers remain at risk from a lack of transparency and the irresponsible lending practices of legal loan sharks.”