Moneynet warns government intervention is insufficient against loan sharks
Written by: Rachel Lane
* and the sharks are not just confined to the back-street lenders - high-street banks and retailers need to address rip off rates
New government proposals to protect vulnerable families from the clutches of loan sharks are 'hopelessly misguided,' according to online data financial comparison site Moneynet.co.uk. The Government announced new savings plans last week which are designed to encourage the financially-disadvantaged to start saving, by raising the threshold on which they would pay tax. This move was designed to discourage households with the lowest incomes from borrowing from loan sharks.
Richard Brown, Chief Executive of moneynet, did not believe the measure would be effective until statutory legislation was in place to control rates charged for credit. "We do not believe that these initiatives to encourage savings will help the poorest in the community to avoid the sharks," he warned. "The most vulnerable families do not have spare cash to save and will unfortunately always be in danger of falling prey to fringe lenders unless a system of statutory control is introduced."
But Brown also reminded consumers that it is not just the grubby backstreet sharks charging unacceptably high rates, "too many of the major High Street names are levying rates more than twice those on offer from the most competitive lenders. The base rate is just 4.5 per cent - so what can the justification be for charging up to three times that amount for personal loans and other services?"
"Store card charging structures also need to be radically reformed. The worst offenders are invariably some of the most prominent names on the high-street, and government watchdogs need to properly show their teeth and crack down on these rip off rates - otherwise some of the biggest names in the UK retail market will continue to make enormous profits from rates, sometimes in excess of 30 %," added Brown.
Moneynet introduced a downloadable loans guide for consumers earlier this year in response to consumer confusion over loans and credit borrowing.
Personal Finance Consumer Information
Consumer information on UK loans
* * * * * * * * * * * * * * *
Moneynet.co.uk ( http://www.moneynet.co.uk ) is the UK's most established personal finance research and data website. The company offers consumers a wide range of low cost financial products: from mortgages and personal loans; to car, home and medical insurance; credit cards; savings accounts and best-buy fixed rate products. Moneynet.co.uk is an ethical, impartial and comprehensive source of consumer finance information, covering the whole of the personal finance sector.
Moneynet was founded in 1997 by Chief Executive Richard Brown to simplify the personal finance market and provide consumers with impartial and interactive information on financial products and services.
Press and consumer enquiries:
Contact: Richard Brown, Chief Executive
Telephone: 0208 313 9030
E-mail: [email protected]
* * * * * * * * * * * * * * * *
About the Author
Press distribution by bigmouthmedia
Contact: Rachel Lane
Telephone: 0131 561 2251
E-mail: [email protected]
Personal Loans for Personal Needs
People generally have a tendency to spend more than what they
earn. This tendency to overspend has become very common in the
UK. Rise in consumerism and an urge to have a better standard of
living have contributed to overspending. When you...read more
Auto Loans : Top 5 Tips For The Best Rate
You've got your eye on that shiny new Lexus - okay, maybe it's a Kia, but it's perfect and you want it to be yours, all yours - as soon as possible. At the same time, you certainly don't want to be saddled with paying nearly double the car's value...read more
Refinancing Your Home Mortgage Loan
Copyright 2005 Dean Shainin You’re considering refinancing your home mortgage loan to save money. Interest rates are the lowest they have been in decades. But, you’re asking yourself, “Is refinancing worth my time and effort. Can I really save...read more
Return to Home