IS YOUR LOAN COMPANY RIPPING YOU OFF?

Despite what they might profess, money lenders with sky high interest rates are preying on the people who are in the worst position of anyone else to pay the cash back. But no more, says the Competition Commission, which is standing up to these 'Loan Sharks' and taking a stand.

Author: Bridget Carter

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Life Insurance News

then add on sky high interest rates might claim to be doing people a favour by offering them the chance to have instant cash.

Instead, they are crippling the poor with debt. So says the Competition ( car insurance quotations ) Commission which will quickly and clearly point out that what these outfits are doing is plain wrong.

What these companies have become, the commission is likely to tell you, is sharks - predators which prey on the most vulnerable in society because they earn the least and have no other way of gaining credit.

It is a sad fact that time and time again these outfits are ( car insurance policies ) reportedly charging up to 1000% interests per year for loans. That's what the Competition Commission is telling us, despite how unbelievable it might sound. Let us for a minute put this into context. The more reputable firms charge 177% and that figure in itself is unbelievably high.

The worst part is there are supposedly 2m Britons buying into these sorts of arrangements. This is for the sole reason that they have little money and the outfits ( life insurance ) who lend cash on your average high street would never dream of letting them through the front door.

But finally the commission is saying enough is enough and taking a stand. What it is doing is making it clear and publicly known that there is no way that interest rates of 177% let alone 1000% can be justified.

It is looking to force these rogue outfits to spell out how much the { life assurance } loan will cost one of its customers. The hope of doing this is that customer might just do a double take when they realise if they borrow £100 the pay back amount will be £200.

Next on the to do list when it comes to tackling rogue money lenders is threatening them with a maximum legal interest limit if they do not back off with the unfair tactics. What this means is that if they then go and rake up the interest rates to extremes, they will be committing a criminal offence.

There are about five main players in the UK who work the ( cheap secured loans ) home credit industry - one of them has half of the market share - and there's another 500 which have a smaller amount of the business.

Their customers? Usually single parents, ( insurance ) who live in areas of high deprivation. Debt collectors turn up at their front door for the payments - usually once a week or fortnight.

You might be thinking to yourself that those who have little money are a high risk and that the debt collectors are within their rights to charge the high interest rates.

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