MP calls for tighter rules on pay day loans
Published 5 Jan 2012 15:36
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HIGH cost short term loans may look appealing to cover Christmas expenses but Cathy Jamieson MP is urging people to sign up to an online petition calling for greater regulation of the credit industry.
The petition has been launched in the wake of new research from the Debt Advice Foundation which shows that 41% of those struggling with debt claim their financial problems are the result of high-interest or payday lending.
If the petition reaches 100,000 signatures it will be put before a parliamentary committee and then possibly on to a debate in the House of Commons.
Cathy Jamieson said: "Many residents in Kilmarnock and Loudoun are likely to have come under increased financial pressure over the festive season and may have taken out high-cost, short-term loans to help with the costs of Christmas.
"I am determined that they, and others like them, should be protected from exploitation by the high-cost credit sector - that's why I'm signing a petition calling on the Government to introduce caps on the cost of credit, and urging my constituents to do the same."
One in four people who take out a payday loan use the money to buy food or essentials for their household, with 44 per cent using them to pay off other debts while the number of consumers who get into debt trouble due to using these lenders is four times higher than it was just two years ago.
Cathy said: "In Kilmarnock and Loudoun, and across Britain, payday lenders and home credit providers are allowed to charge as much as they like for credit, often causing severe financial difficulties for their customers.
"But in Europe and North America, consumers are protected from exploitation by regulations imposing caps on the amount that lenders can charge for credit. This petition calls on the Government to stop delaying action on this issue and ensure people can use these companies without fear of exploitation. Concerned residents should sign the petition as well and forward the link to their friends."
To sign the petition, visit http://epetitions.direct.gov.uk/petitions/20219
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