Public in need of protection
WEST Ham MP Lyn Brown discusses concern over credit this week in her exclusive Recorder column. She writes: I have lost count of the number of letters I receive each year offering me money. I get letters and e-mails from credit card companies that I so
WEST Ham MP Lyn Brown discusses concern over credit this week in her exclusive Recorder column.
I have lost count of the number of letters I receive each year offering me money.
I get letters and e-mails from credit card companies that I sometimes have not even heard of, offering me credit to fund that new kitchen or holiday.
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I have also found my credit limit raised on a credit card without my asking, or agreeing to it. At first, I found this welcoming, but then realised just how easy it is to ratchet up a debt that becomes daunting and unmanageable.
It is these types of practices that can encourage people to over-extend their borrowing and get them into trouble.
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People need access to credit to get them through difficult times and to buy large items that cannot be budgeted for, but we also know that a small minority of companies and individuals will seek to take advantage.
Over the past week, the Government has launched plans to improve protection for the public from credit card companies. Those plans include banning companies from raising borrowers' credit limits without consultation and from sending out unsolicited credit cheques.
I am also looking forward to the protection that the new legislation will offer those of us who shop on line.
Frankly, I could not cope with my job and the Christmas shopping, if I did not surf and shop at midnight. But I am always wary and a little nervous about using a new shop or site. I am not the only one. Almost a third of all internet users do not shop on -line, due to a lack of trust.
This new bill offers us internet shoppers some protection. The Government is going to set up a new agency to help us get our money back, when things go wrong with on-line scams and crime. That agency will also be responsible for helping us to get some justice over unauthorised bank charges.
It will also help people who do not shop on-line, don't have credit cards or are ineligible for in-store credit options.
There are many in our community who have difficulty getting access to credit and it forces them into the hands of people offering ridiculously high levels of interest for relatively small amounts of money. "Pay day lenders," and other legal doorstep credit companies, can charge more than1285 per cent APR!
That's why the recent budget allocated additional money to the Social Fund, which provides grants and interest-free loans to families on low income and additional money to support credit unions. Credit unions offer ways to save safely and extend low cost loans to members.
The interest rate is 1.5 per cent per month. Newham has a credit union based in Stratford, which can be contacted on (020) 8555 5388.
Many of the ideas presented in the Consumer White Paper are about providing us with better information, so that we can make up our own minds. Sometimes, it is difficult for people to act alone and the Government must step in - particularly in these times when we face increased financial pressure.
What do you think about these proposals? You can write to me at Lyn Brown MP, House of Commons, London SW1A 0AA, ring my office on (020) 7219 6999 or e-mail at email@example.com