Labour will crack down on loan sharks

A Labour Government will crack down on predatory loan sharks by making it illegal both to charge exorbitant interest rates and to exploit uninformed borrowers, Labour’s Consumer Affairs Spokesperson Carol Beaumont says.

Labour today released its Consumer Affairs policy which includes working with at-risk families to improve their budgeting skills and developing financial literacy programmes in conjunction with community groups and schools.

“Education is an important factor in protecting vulnerable Kiwis from predatory lenders who prey on poverty and desperation.

“Predatory lending traps families in a downward cycle of debt as they become more and more squeezed by the growing costs of living.

“That’s why Labour will work with more banks to establish social lending schemes to provide no-cost or low-cost loans. These loans aim to provide a social benefit, rather than a profit result, for people who can’t easily access mainstream financial services.

“Credit unions can play an important role in consumer finance both by increasing choice and providing an alternative to loan sharks. Labour will reform the law so they can expand their services and cut their costs.

“We will also protect vulnerable consumers by boosting access to dispute resolution services and requiring vital information be provided in other languages.

“Under a Labour Government, workers will have more money in their pockets, making them less reliant on predatory lenders. We will raise the minimum wage by $2 an hour in our first year.

“Labour will bring the loan shark industry under control and stop vulnerable families being taken advantage of,” Carol Beaumont says.

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