Carol BEAUMONT
Consumer Rights and Standards Spokesperson

5 May 2013 MEDIA STATEMENT

High Profile Loan Shark Stories Tip of the Iceberg

Fresh revelations about the damage done by loan sharks charging extremely high interest without even properly documenting the loan reinforces the urgent need for legislation, says Labour’s Consumer Rights and Standards spokesperson Carol Beaumont.
 
The New Zealand Herald yesterday reported the story of a woman targeted by a loan shark operating in a casino. He was charging her incredibly high interest rates for a loan that may not even be lawful.
 
“This case is shocking. But it’s just the tip of the iceberg. Many more New Zealanders are suffering after taking on a small debt lawfully from a loan shark that later balloons out of control because of the high interest rates they’re being charged.
 
“Pay day lenders, loan sharks and truck shops are thriving in our communities, targeting people who are struggling to pay their bills.
 
“This isn’t a new problem. In fact, Deputy Prime Minister Bill English acknowledged two years ago that vulnerable Kiwis were being targeted by credit providers whose behaviour was largely unregulated.
 
“Despite that, this Government hasn’t prioritised the issue. Its failure to do so has caused terrible stress and financial pain for thousands of Kiwi families.
 
“Budget advisors say the problem is growing with families are forced to take on high interest loans just to cover everyday costs, including rising power bills.
 
“But National has just sat on its hands for five years watching while families face financial ruin. It has failed to create jobs that pay decent wages, to tackle the rising cost of living and it has left vulnerable families at the mercy of predatory loan sharks.
 
“A week ago, a Bill was finally introduced to Parliament beginning the process of controlling loan sharks. But it’s a little too late for many Kiwis whose lives have already been damaged forever,” said Carol Beaumont.

 ENDS

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