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.
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?
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