Families as shark bait

    Once again people in poverty have been shown to be vulnerable to
    unreasonable interest rates, but this time not from the local loan
    shark. As the pressure group Debt On Our Doorstep launches a
    campaign to highlight the issue, it has emerged that a new credit
    card from lender Provident Financial will offer interest rates of
    nearly 70 per cent. Its target audience? Low income families.

    The company’s excuse for issuing the card at 20 per cent above
    its own standard rate is that its intended customers are “high
    risk”, meaning that they may have defaulted on loans in the past.
    Surely they are aware that high interest rates are not just a
    symptom of the problem, they are among its causes.

    Debt On Our Doorstep has rightly called for a 30 per cent
    interest rate ceiling to be included in the Consumer Credit Bill.
    But the government should also give more attention to the social
    fund. It is often because of the miserliness of the social fund
    loan system that families are driven to credit sharks in the first
    place. More social fund claimants should be given grants and, where
    loans are necessary, they should be more readily available.


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