Tory MP Sir Gerald Howarth is consultant to payday lender QuickQuid

Former defence minister advising firm under fire for exorbitant interest rates

A former Conservative minister has taken a job advising a firm of payday lenders that charges customers annual interest rates of up to 1,734 per cent.

Sir Gerald Howarth, who was sacked as a defence minister by David Cameron in last year’s reshuffle, recently accepted the part-time consultancy role from the owners of QuickQuid.

QuickQuid, the British subsidiary of CNU Holdings to which Sir Gerald is contracted, is facing an investigation by the Competition Commission along with other payday lenders. In March, the Office of Fair Trading (OFT) named it among 50 companies accused of “widespread irresponsible lending”. The OFT said the firms were reliant on lending to customers who could not afford to pay their loans back on time. Almost half of lenders’ revenues came from loans which had been rolled over or refinanced.

A second investigation into the payday loans sector is also under way by the Financial Conduct Authority which is examining rollover loans and some of the exorbitant interest rates charged.

In an official declaration to Parliament released at the end of last week, the Aldershot MP described his job as “advising on the effects of legislative changes and other matters”. He expects to be paid between £15,000 and £20,000 for his work.

In the register of interests, Sir Gerald makes no mention of QuickQuid. He describes himself as a “Consultant to CNU Online Holdings LLC (Enova), of 200W Jackson Blvd Suite 500, Chicago IL 60600”, which trades as QuickQuid.

Its latest accounts show that the firm’s UK revenue has rocketed from £58m in 2010 to £196m in 2012 as a result of rapid expansion into the unsecured loans market sold over the internet. Its website offers cash loans within 10 minutes of approval. However, someone borrowing £200 for a month would have to pay back £260 and a customer borrowing £1,200 over 10 months would have to pay back £2,831.34.

Daniel R Feehan, chief executive of QuickQuid’s parent company Cash America, warned in the company’s annual report that profits were under threat from plans for tougher UK lending rules. “The most frustrating part of this process is the uncertainty it creates – making strategic planning difficult and promoting doubt for investors.”

Sir Gerald’s consultancy was raised with David Cameron by the Labour MP Dave Watts at Prime Minister’s Questions. Last night, Mr Watts said Sir Gerald’s involvement was unacceptable. “I don’t think anybody should be getting involved in a payday lender. It is very regrettable that an MP would want to take money from people who cause so much misery to constituents.”

The Labour MP Stella Creasy, who has led a campaign against high-interest internet lenders, called on Sir Gerald to “examine his own conscience”. “I have helped people who have fallen into debt after taking out a loan from QuickQuid. I have seen the misery it causes. I am not trying to ban these companies but merely introduce some sort of cap over what they can charge. It is up to Sir Gerald to examine is own conscience if he wants to act on their behalf.”

Sir Gerald said he had taken up the role because it was an area in which he had a long-standing interest. “For 20 years, I was consultant to the Consumer Credit Association,” he said. “I think it is a business that is not well understood by people who do not have need of that kind of finance – people for whom the banks offer no service. I am very happy to help out.” He defended the interest rates charged by payday lenders, pointing out that annual interest rates were not a good way of assessing the total cost of a loan. “If you go and try and borrow £150 from a bank, first and foremost, they won’t lend you that kind of money and, if they did, they would charge you an arrangement fee. The APR on that would be very large as well.”

Last night, QuickQuid was more circumspect on his role. “The arrangement with Sir Gerald was not intended to be long term and will be coming to an end. We are highly appreciative of Sir Gerald’s insights, expertise and knowledge and wish to thank him for his advice.”

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
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.

iJobs Job Widget
iJobs General

Savvy Media Ltd: Media Sales executive - Crawley

£25k + commission + benefits: Savvy Media Ltd: Find a job you love and never h...

Austen Lloyd: Corporate Solicitor NQ+ Oxford

Excellent Salary: Austen Lloyd: CORPORATE - Corporate Solicitor NQ+ An excelle...

Reach Volunteering: Financial Trustee and Company Secretary

Voluntary Only - Expenses Reimbursed: Reach Volunteering: A trustee (company d...

Recruitment Genius: Senior Project Manager

£45000 - £65000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible