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PRESS RELEASE

LICENSED LENDERS BENEFIT FROM CONSUMER CREDIT WHITE PAPER

10th Decemer 2003

This week’s White Paper announcing changes to Consumer Credit Regulations and proposing a clamp down on loan sharks will drive customers into the hands of extortionate lenders.   Nothing in the White Paper tackles the main issue of how people on low incomes and benefits can access loans at a reasonable price.

 The Consumer Credit Association have welcomed the White Paper but with their members standing to gain most from the tidying up of the consumer credit industry, it is hardly surprising.
The Regulations will do nothing to challenge the high charges made by the licensed credit industry.   With no capping on interest rates being proposed and without providing people with an alternative source to purchase essential items.   The Regulations – which will probably take many years to fully implement – will only benefit people on medium and high incomes, particularly those with house equity.
IMPACT have worked on this issue for 4 years, proposing an ethical alternative to companies that charge in excess of 120% APR.    Our proposal (a summary is attached) would provide people on low incomes (whether that’s minimum wages, benefits or a combination of both), people who are most vulnerable to the sales tactics of the predatory lending business, families who don’t have a choice when it comes to borrowing to buy essential purchases (e.g. clothes for their children, a cooker or a computer for homework), with access to reasonably priced finance.   These are the people who have not benefited from the house price boom (because they rent their homes) and who struggle – each and every week – to make their money last out. 

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