UK DEBT LEVELS REQUIRE LENDING RATE CAP.

UK DEBT LEVELS REQUIRE LENDING RATE CAP.

UK GOVERNMENT MUST LEGISLATE TO CONTROL LEGAL LENDERS.

SNP MSP John Wilson has today called for tighter legislation to cover lending practices as a report from Citizens Advice Scotland highlights the increasing levels of consumer debt in Scotland to legal lenders.

CAB Scotland’s report “Drowning in Debt” raises real concerns over the high levels of debts owed to high street banks and on store cards or to catalogues as well as to doorstep lenders.

CAB Scotland’s research shows 88% of those approaching them for debt advice owed money to banks and building societies, with 65% owing money to other forms of consumer credit – from store cards to credit cards and 42% to informal doorstep lenders.

SNP MSP John Wilson, formerly a director of the Scottish Low Pay Unit today called for action to control the behaviour of lenders.

“Lenders have shown they cannot be trusted to behave responsibly. What is clear is consumers need protection from legal lenders as well as loan sharks.

“It is time for the UK Government to act to cap interest rates – not only for doorstep lenders like Provident but for the banks, building societies and store cards who are charging exorbitant rates and using undue pressure to extract repayments.

“With the Bank of England charging only 0.5% interest, rates of 25 or 30% are extortionate never mind rates of 300% or more.

“As recession bites and more families look to lenders for financial support the UK Government can and should legislate to protect our consumers with a cap on interest rates and better regulation of debt recovery.

“The SNP Scottish Government is supporting the work of Citizen’s Advice Scotland as it provides help to those facing mounting debts, and is supporting home owners with investment in alternatives to repossession and new proposals to tighten up the law.

“But what is needed – and needed now, is a cap on the interest rates for doorstep dealers like Provident with their charges of nearly 300% and for banks and building societies charging 30 times the Bank of England rate.