Payday lenders will have a levy imposed on their profits that would see millions of pounds diverted to credit unions, under plans announced by the labour party.
Should win the next general election in 2015, Ed Miliband said his party would cap the cost of credit, stop the spread of payday lenders on highways and forcing them to fund credit unions, such as business believes that offer a real alternative to those in need.
Work also wants to capitalise on the crisis in the cost of living, which has been further boosted with news yesterday that drastically wages fail to keep pace with inflation. The Office of national statistics said that wages grew just 0.7 percent in the year to August, while running at 2.7% inflation.
Miliband said: "we must protect the most vulnerable of our society from worse than exploitation of payday lenders. And it is right that the companies benefiting from the financial plight of the people, accept their responsibilities for ensuring affordable credit is available. "
Stella Creasy, MP for Walthamstow and opponent of payday lenders, added: "If helping to raise capital credit unions have to give more, these companies out of their football and malls, kicked or debt advice to those caught in spiraling debt from the practices of these companies, these are the people who it is first hand with the failure of this Government to learn from other countries in capping the cost of credit.
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"We are determined to see a CAP introduced in the United Kingdom, so that we can see an end to this legal loan sharking and give British consumers the protection they deserve."
Business payday loans have been heavily criticized for targeting vulnerable people that can afford to take in additional loan priced at cielo alto nearby. Some lenders have even been tossed for excessive late payment fees and interest rates sky-high 4,000% or more, while some have been found falsely taking money from customers.
Payday lenders have been governed by conducting financial Authority by April 2014, taking over from the Office of Fair Trading (OFT). The OFT was accused in may 2013 to be "ineffective" to regulate the market and being "timid rather than tough", a Committee of MPs.
The public accounts Committee (PAC), led by Chairman Margaret Hodge, strongly criticized the Office of Fair Trading to fail "proactively identify risks of malpractice," relying instead on consumer complaints and information from other third parties
Short-term loans are designed for cash borrowed halfway through the month to tide the borrower until they are paid later, whereupon the loan is constant. Typically used by people with bad credit ratings and/or no access to short-term credit as an overdraft or credit card. How do I register loans, this type of debt is extremely expensive: the average APR on payday loans is well over 1,000% and in some cases may be considerably more.
An increase in the general price level that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is 4 percent, this means that the price of goods and services is 4% higher than a year earlier, requiring extra 4% and spend to buy the same things that we bought 12 months ago and that any savings and investments need to generate 4% (after taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer price index (CPI) as its official measure of inflation (see also retail price index).
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