Call for Interest Rate Controls on Personal Loans
Campaign group Compass has claimed that almost 70 per cent of people want the UK government to cap the interest rates that can be charged on unsecured personal loans.
A survey carried out for the group by pollsters YouGov found 68 per cent of people believed that it was up to the Government to protect the public from unscrupulous doorstep lenders and loan sharks who can charge people 2,500 per cent or more on a personal loan. Compass said that some arrangements for personal loans were no more than “legal loan sharking” and called for controls to be placed on loan interest rates – just as is planned for credit and store cards.
The survey also found that people wanted more controls on other forms of credit, such as payday loans and pawnbroking. Furthermore, 69 per cent of respondents wanted more government support for credit sources such as credit unions.
Compass general secretary Gavin Hayes told BBC News: “The public feel that just capping excessive credit and store card rates falls short. They want caps on the cost of credit to cover the whole of the unsecured credit sector that causes so much misery for thousands of people in the UK that can least afford it.”
“This is a key test of the coalition government’s stated commitment to create a fairer society. Now we need to see if it backs the people or the financiers.”
Earlier this month, the Consumer Focus group published research estimating that 1.2 million people in the UK took out payday loans every year, with a total value of £1.2 billion. A coalition of pressure groups, MPs and other interested parties – including Compass – have now signed up to the End Legal Loan Sharking campaign.
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