MP is battling to stop the greedy legal loan sharks

They prey on the hard-up and make them pay over the odds for credit. But the doorstep lenders may have met their match

The campaigning MP Stella Creasy is taking on the loan sharks. The former Walthamstow councillor believes that expensive credit companies have got away with ruining people's lives for far too long. She says the Government needs to act now before the spending cuts force more struggling folk into a the clutches of the sharks and a potentially disastrous debt cycle.

"I'm very worried that the Government don't get the real problem," Stella says. "The government has to understand that action is needed now to address the high cost of lending which exploits some of the poorest people in our communities who can least afford the charges doorstep lenders set."

The Labour MP is introducing a Ten Minute Rule Bill in Parliament next Wednesday which is designed to ensure that everyone – not just those with good credit ratings – can get affordable credit and is protected from exploitation by legal loan sharks. The Consumer Credit (Regulation and Advice) Bill supports the work done by organisations such as Compass and the End Legal Loan Sharking campaign that we have reported on before in these pages. It's estimated that around 3 million people use the expensive doorstep lending. Typical charges can be as much as £82 for every £100 borrowed, which can be crippling for struggling families.

The Bill seeks to introduce a cap on the total lending rate that can be charged for providing credit, including any late payment and default charges. If such a move were adopted, it would prevent extortion by limiting the total amount that lenders can charge. Alternative government proposals to set an interest rate cap could be a disaster, Stella believes, as it would increase the market for illegal loan sharking.

The MP has a lot of experience with the issue herself, having been a local councillor in Walthamstow for several years. She says she has met many constituents who have fallen into the clutches of unscrupulous loan sharks who simply add interest on to interest so that the cost of borrowing multiplies over and over again.

The Bill also aims to improve access to the credit unions, by integrating them with the Post Office network. There is also provision made for increased funding of debt counselling and advice agencies, and greater powers for local authorities to veto licences for high-street credit agencies. Taken together, the measures aim to tackle the problems associated with increasing amounts of personal debt. We know the problems are only going to get worse after the Government's spending review, so support for the Bill should be wide. But Stella's worried that she won't get the necessary support from her MP colleagues.

Ministers have refused requests for a meeting to discuss her proposals, despite many of them having supported a move to address loan shark problems in 2005. "It's frustrating that my requests for a meeting on this issue have been completely ignored," Stella says. "Five years ago, many MPs who are now government ministers – including Nick Clegg, Danny Alexander and Ed Davey – signed an Early Day Motion which sought to address extortion by doorstep and payday lenders. I want to know why they have changed their minds since then."

The Consumer Credit (Regulation and Advice) Bill will be debated in Parliament on Wednesday, immediately after Prime Minister's Questions.

Arts and Entertainment
Ramsay Bolton in Game of Thrones
tvSeries 5, Episode 3 review
News
peoplePair enliven the Emirates bore-draw
Arts and Entertainment
tv
News
Britain's opposition Labour Party leader Ed Miliband (R) and Boris Johnson, mayor of London, talk on the Andrew Marr show in London April 26
General electionAndrew Marr forced to intervene as Boris and Miliband clash on TV
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

    Day In a Page

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    How a costume drama became a Sunday night staple
    Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

    Miliband promises no stamp duty for first-time buyers

    Labour leader pushes Tories on housing
    Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

    Aviation history is littered with grand failures

    But what went wrong with the SuperJumbo?
    Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

    Fortress Europe?

    Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
    Never mind what you're wearing, it's what you're reclining on

    Never mind what you're wearing

    It's what you're reclining on that matters
    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence