Update: Huge progress on payday lenders -- THANK YOU!
Yesterday the House of Lords forced the government to rewrite a part of the Financial Services Bill to allow a cap to be imposed on the interest rates charged for payday loans.
I'm keeping the petition open until we know for sure that the cap is definitely going to be made law - so keep sharing and signing.
Thanks for all your support - I'm overwhelmed by the response!
Our foster daughter Karen (not her real name) is a hard worker. She has been ever since she left school at 16. Despite having special educational needs, she set her mind to getting a job and working to support herself.
But things have not always been easy for Karen. When she left our care she slipped into a cycle of debt that she couldn't afford to support.
That was when she turned to a so-called pay day lender.
The sky-high interest rates mean that while it is possible to borrow to pay off debts it becomes quite impossible in turn to repay those loans. Karen used up to eight companies in an unrelenting chain of borrowing. £100 quickly became £1000 and Karen could no longer track who she owed money to. When the threatening letters and phone calls started she was forced to leave home and started sleeping at friends houses - moving from sofa to sofa. This means she’s sometimes late for work and the job she’s worked so hard for is at risk. All for a loan of £100.
When I heard about all this, I tried to do what I could to help. But even with Karen’s authority these companies were almost impossible to deal with. The debts had been sold, the start dates almost untraceable, and every day the interest rates continue to increase. It was only the support of Karen’s bank and a solicitor that we were able to get everything on track. Karen was lucky - she had a support system. Others don’t - they are easier prey for these companies.
I’ve been working with Movement for Change to tackle legal loansharking and give practical support to the fairer alternatives. Find out more here.
On Wednesday this week the House of Lords will be asked to vote on something that could stop others being hit like Karen was hit. Some of these firms charge up to 16,000% - and Lords could decide this Wednesday to cap interest on these loans at a far more affordable level. That’s why I’ve started this campaign to urge the Lords to vote for this amendment to the financial services bill.
I know Karen should never have got into debt and I know that people should take responsibility for their actions. But at a time when it’s hard for many of us to make ends meet these companies are exploiting the very poorest just to make huge profits.
Please join me in trying to make a difference.