MPs back call for cap on doorstep lenders rates

More than 150 MPs have backed a call for a cap on the interest rate charged by doorstep lenders, typically between 160 and 800 per cent APR.

The call was made by campaigning group Debt on Our Doorstep, which says that the schemes exploit people on low incomes.

Doorstep lenders offer small loans and then collect payments through a series of weekly collections.

A recent report by the Competition Commission (CC) noted that the risk of bad debt is high and limited competition in the market boosted interest rates above market value.

“Low income households are being targeted and ripped off by doorstep lenders, paying way over the top for credit,” said Liz Atkins, of the National Housing Federation.

“Housing associations are working hard to help those who are financially excluded but the government needs to go further if it is really serious about tackling the problem.

“It’s time to cap the ridiculous interest rates set by home credit companies and doorstep lenders.”

The CC added that some people without access to the best rate of credit value their personal relationship with the debt agent and the convenience of payment collections.

© Adfero Ltd

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