Who will protect borrowers from the loan sharks?
As we have covered in one of our articles today, a loan shark in Newcastle today received a 51 week suspended jail sentence after being found guilty of charging up to 2500% on a £500 loan. The unlucky couple who took up the loan were forced to pay back nearly £90,000 over a seven-year period and suffered significant health and financial issues.
The UK government and the UK regulators have long been on the trail of UK loan sharks although despite promising to clamp down on excessive interest rates today's court ruling does not exactly send out the right message. Even though many people believe the UK recession is coming to an end, more and more people are being tempted into the loan shark trap which will see them pay back many times what they borrowed and could see them tied up with excessive payments for years to come.
If a loan shark charging 2500% and taking £90,000 in payments for an original £500 loan does not justify a prison sentence then what does?
The truth is that the vast majority of similar cases of excessive interest rates go unreported because ultimately those in question need the money and need the assistance in the future. The official figures may suggest that loan shark business is falling, but on the streets of England, Scotland and Wales this could not be further from the truth.
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