I'm Rich Beyond My Wildest Dreams...

Tonight’s episode of Dispatches on Channel 4 focused on the lower echelons of the credit industry – doorstep loans, payday lenders and what they termed ‘rent-to-buy’ companies, all of which are effectively forms of sub-prime lending targeting the poor, and a very profitable business to the companies pedalling it.

In the days following my bankruptcy I began receiving mail-shots from some of the doorstep loan companies mentioned in the programme. It was immediately obvious that they must have some form of monitoring system that alerted them to new and potentially vulnerable targets. Just been made bankrupt? Here’s a dummy cheque for £500 – turn this into CASH – NOW!

Such is the size and power of the credit industry in Britain, that the loan companies are permitted to target people who have just been declared insolvent with more credit, allowing them to immediately begin racking up new debts, which they have even less chance of repaying. Whilst the exorbitant interest rates on these loans are admittedly made clear in the adverts, they are unmistakably designed to ensnare people into another particularly nasty debt trap.

Say 'Yes' to a Lifetime of Poverty

The programme also highlighted American payday loan companies who have begun moving into the British high street. Having had restrictions imposed on the interest rates they are able to charge in the US, these companies have found somewhere with less  regulatory inconvenience to do business. So whilst the British government dithers on whether to introduce a cap on the rates these companies can charge, the money lenders can continue to enjoy rich pickings to the detriment of the most vulnerable groups in our society. Never mind the credit crunch – Britain is still a great place to do business.  

 

We used to have a long history of credit controls in Britain, but these were done away with under the Thatcher government and her policies of deregulation. If America, the home of free market fundamentalism and lax regulation can clamp down on these despicable companies and their insidious practices, then surely the British can follow suit?