Labour to put predatory lenders on notice

Labour is today putting loan sharks and other predatory lenders on notice," says Consumer Affairs spokesperson Carol Beaumont.

Its Consumer Affairs policy, to be released in full this afternoon, includes provisions for clamping down on unethical money lenders.

"These unscrupulous businesses will be held to account under a Labour government," Carol Beaumont said.

"On main streets and from out of the back of trucks, targeting middle and low income areas, loan sharks have lent at excessive interest rates. They've added large default fees to overdue debts and have repossessed basic household items like bed linen and children's toys.

"Loan sharks have been allowed free rein under National. In fact National deliberately opposed an attempt by Labour to stop loan sharks in its objection to the Credit Reforms (Responsible Lending) Bill. Recently, however, the government has clearly felt the weight of community opinion, and the approach of an election campaign, speaking out sporadically on the dangers these lenders pose to our communities.

"But the fact is National has done nothing to tackle these practices, rather it has stalled progress.

"Labour would end the review of the Credit Contracts and Consumer Finance Act and pass comprehensive legislation on its findings within twelve months of taking office. This is what the community is calling for, and Labour is listening.

"Labour's legislation would directly deal with exorbitant interest rates and put in place provisions for responsible lending. Such provisions would not only limit what loan sharks can accept as security but would require full disclosure of the component costs of loans, so borrowers are no longer blindsided by additional fees.

"It would also prohibit certain possessions including basic household essentials and items which would negatively affect children, being used as security.

"To effectively deal with loan sharks we need to have comprehensive policies to lift financial literacy in our communities so people have the skills to manage the money they have. We also need to face the reality that with ever increasing costs and low wages families will need on some occasions access to credit on reasonable terms.

"Labour will address all these concerns, as well as cracking down on celebrity endorsements and incentive advertising with timely, effective legislation," Carol Beaumont said.

Authorised by Carol Beaumont, MP, Parliament Buildings, Wellington

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