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Tougher line on loan sharks welcomed

Wednesday, 20 June 2007

Tougher line on loan sharks welcomed

Wellington, 20 June 2007 - The Salvation Army is welcoming the Government's moves to tighten the net on loan sharks.

The Government announced that fringe lenders, or loan sharks, would have to be registered and undergo checks such as to ensure they didn't have relevant criminal convictions and were not undischarged bankrupts. Registered lenders would also have to be a member of a dispute resolution scheme.

Social Policy and Parliamentary Unit Director Major Campbell Roberts says that the moves, while not a complete solution, will provide an increased level of protection for vulnerable people in the community.

'Compulsory registration and vetting is a positive step towards removing inappropriate individuals from the loan business.

'If people can have confidence that lenders will be of a certain minimum standard, then they can focus their attention on the nature of the loan conditions.

'The dispute resolution scheme is also positive, because it means unscrupulous lenders are more likely to be held to account, which has to be a good thing for people who borrow money.'

Major Roberts says that although the Government rules are a positive step forward, they do not protect borrowers from high interest rates and unreasonable conditions, which are often associated with loan sharks.

'If people are struggling with their finances, I would recommend that they get in touch with a reputable budget advisory service such as those run by The Salvation Army.

'Getting help with their budgeting can mean that people don't find themselves in a position where they feel the need to visit a loan shark.'

ENDS


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