MPs urged to back curbs on loan sharks

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With Parliament voting on an amendment to curb the excesses of legal loan sharks today campaigners have stepped up demands for MPs to back the reforms.

The amendment is key in the fight against the excesses of legal loan sharks in Britain and has support from MPs in different parties, including some Conservatives. The reforms would give the financial regulators the ability to cap the excessive costs of credit offered by loan sharks. By capping charges it would limit the costs for loans to an acceptable ceiling and help millions of families who are borrowing from loan sharks to make ends meet by encouraging firms to reduce their charges.

Local Labour Parliamentary Spokesperson Andrew Pakes, who is supporting the campaign, has urged our two Conservative MPs to back the move in Parliament, alongside other Conservative MPs such as Philip Hollobone MP (Kettering), Sir Peter Bottomley (Worthing West) and Neil Parish (Tiverton and Honiton).

Campaigners have also taken to twitter to contact the MPs ahead of the vote using the hashtag #savebianca.

Clause 40 of the Financial Services Bill has been tabled by Walthamstow MP Stella Creasy and will be voted on in the House of Commons on Tuesday 22 May.

According to new research by consumer group Which?, over 60 per cent of people who took out payday loans were using the money to pay for household bills or buying other essentials like food, nappies and petrol. The new figures show an alarming picture of people getting trapped in a downward spiral of debt, caught by exorbitant penalty charges because they cannot afford to pay back the loan on time.

Andrew Pakes, Labour & Co-operative Parliamentary Spokesperson for Milton Keynes said: “Far too many families are struggling to make ends meet and turning to loan sharks for help as the recession continues to bit. Loan sharks have become the boom industry of the recession offering short-term help at extortionate rates.

“This is not about borrowing for luxuries; research shows the majority of borrowers take loans out to pay bills and household essentials like food. I hope our MPs will listen to the cross-party consensus rather than their party bosses this week and vote to regulate the interest these firms can charge.”

For more info on the research by Which? See here: http://www.which.co.uk/news/2012/05/new-which-research-exposes-payday-loan-failings-286258/