Today’s (Thursday 27 June) referral of the payday loan industry by the Office of Fair Trading (OFT) to the Competition Commission should jolt the government into getting a grip on an industry whose exploitation of the vulnerable is out of control, says Unite, Britain’s largest union.
Commenting, Steve Turner, Unite executive director for policy, said: "The government must recognise the damage being done to our communities and the growing debt and poverty resulting from the exploitation of legal loan sharks.
“There have been repeated warnings that far from being respectable businesses they are out of control - only last week Wonga hiked its interest rate to a savage 5,600 per cent.
"Payday lenders are preying on people in hardship, exploiting their desperation and pushing them deeper into debt with their rip-off rates. They are the least regulated in the western world and add nothing to society that an expansion of credit unions and community banks couldn’t do better and fairer. The OFT referral exposes their irresponsibility and they have no place in our communities.
“A survey of Unite members showed that the average amount borrowed each month to make ends meet had jumped by £126 to £326, making the third week of the month Wonga week for many.
"Their vulture like practices that prey on the vulnerable need to be brought under control. This is why Unite is backing MP Paul Blomfield's bill to regulate the high cost credit industry as an essential step towards ridding our society of this exploitation once and for all."
For further information contact Alex Flynn, Unite head of media and campaigns, on 020 3371 2066 or 07967 665 869.
Notes to editors:
- Unite is Britain and Ireland’s largest trade union with 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey