Richard is calling for new controls on payday loan companies.
Figures released as part of Sutton Council’s “Economy Watch – Economic Indicators” report show an alarming rise in debt enquiries from Sutton residents to the Citizens Advice Bureau. Richard said, in a letter to residents, “I am increasingly concerned that people are turning to these companies without looking into the real costs of borrowing money, which in some cases that I have investigated are well over 1000% APR.”
This was among the principal conclusions he drew when he spoke to the Council’s Housing, Economy and Business Committee about the latest data on Sutton’s economic performance. He pointed out that, amongst the generally positive data on economic development in Sutton, enquiries to Sutton’s Citizens Advice Bureau were up by about 5% in the last quarter with debt enquiries increasing by 8.8%. There has to be a fear that recent welfare cuts will make the position worse.
In a letter to residents he called for consideration to be given to establishing by law some upper limit on the interest rate that can be charged on loans.
Richard said “I have said my piece, at Sutton Council meetings, about the problem of loan sharks and “payday” loans, and I cannot see why it is impossible to have a maximum figure for the interest charged on these loans (it can be well over 1000% APR) imposed in law.”
As long ago as 9 May 2011 Richard made a speech to a Sutton Council meeting calling for an end to illegal loan sharking, drawing attention to loan offers he had found on the Internet where the APR was over 1000%.
His comments come in the same week that Newcastle United hit the headlines over the sponsorship of their football kit by a “Payday Loans” company and evidence was published of an increase in this type of lending. He was commenting on a paper “Economy Watch – Economic Indicators Report” presented to the Council’s Housing, Economy and Business Committee, of which he is vice-chair. The latest data are mostly encouraging on economic trends in Sutton, showing Sutton is surviving the recession well.