STOP THE RIP OFF
Actor Michael Sheen calls for an end to ‘unfair high cost credit’ targeted at UK’s poorest families
ACTOR Michael Sheen today branded ruthless high-street lenders "predators" as he vowed to lead a "fight for fairness".
The Hollywood star launched a campaign in the same week The Sun revealed our own Stop The Credit Rip-Off campaign - fighting against high-street and doorstep loan sharks.
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The Welshman said of his End to High Cost Credit Alliance campaign: "This is a fight for fairness, people need a fair affordable credit product. Lenders need a fair, affordable credit product. Fairness for the lenders, fairness for the people they serve.
"The question of how to make affordable credit available to people who cannot access mainstream credit is a complex and contested public policy issue.
"We need you, we need to understand your needs, your challenges, your opportunities. Fair, affordable, responsible finance for all is possible. You prove it's possible.
"Yes it is a complex issue, but at the heart of it is a simple truth: life can be hard, it doesn't need to be made harder by businesses trying to make as much money as they possibly can out of other people's difficulties."
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As we embarked on our campaign, we revealed yesterday:
- MPs and Peers who have backed our campaign to protect the UK's poorest families
- Thousands of Sun readers backed the campaign on social media, via comments and on email
Sheen's Alliance brings together over 50 partners including government, debt charities and technology firms to help make credit fairer.
He said: “As founder of the Alliance I am excited to be going public for the first time with our plans.
"Collectively and strategically we will be getting behind organisations, providers and initiatives that seek to improve access to fairer credit and support across communities in the UK as well as addressing the wider welfare needs of those where credit is not the right option.
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Have you ever had a problem with a rent-to-own firm or doorstep lender? Tell us your story! Email: [email protected]
Why we want to Stop The Credit Rip-Off
WE never want you to pay more than double the amount you've borrowed - whether it's for a new sofa or a loan to help pay your bills.
That's why The Sun has launched a campaign calling for a cap on the total cost of rent-to-own loans and doorstep lending at double the original price or loan amount.
A similar cap was introduced for payday loans in 2015 and since then the number of people struggling with unmanageable debts to those lenders has more than halved, according to Citizens Advice.
People on the lowest incomes, living in the poorest places, are paying a poverty premium - up to 7 million people have resorted to high-cost credit, according to the Department for Work and Pensions.
People whose wages or benefits don't stretch far enough need to borrow from rent-to-own or doorstep lenders to help pay for things such as an unexpected bill or to furnish their homes.
These come with exorbitant rates of interest - more than 1,500 per cent in some cases of doorstep lending.
It is scandalous that one mum who borrowed cash to help keep a roof over her family's head and ended up paying back over THREE times the original amount.
It's time to stop the credit rip-off.
Here's what we demand:
Rent-to-own
- Cap on all repayable costs at double the item list prices (including fees, add-ons and interest)
- Ban on incentives for all sales staff
- Ban on discounts for existing customers to tempt them into more credit
- Companies to publish example interest rates and costs on all payment options
Doorstep lending
- Cap at double the original amount borrowed
- Stricter affordability checks
- Ban on discounts for existing customers to tempt them into more credit
It's time to Stop the Credit Rip-off.
"Our message is simple - credit is good, but it's not a system where it is fairly targeted and maximised for profit over social impact."
The actor, who appeared as Tony Blair in the Queen and football manager Brian Clough in the Damned United, said he had been inspired to take action against problem debt after seeing friends and friends in Port Talbot Struggling.
"I've become increasingly aware of friends and family dealing with debt with overdrafts, credit card payments, pay day loans, home credit.
"It's a really hard subject to talk about but I've had friends breaking down in tears talking about how it is affecting their relationship, their self-esteem, their children's lives."
What has the FCA said about the campaign?
FCA'S Head of Strategy and Competition, Chris Woolard, said: "I want to acknowledge the work that everyone has done in bringing together this alliance."
Speaking about those who will be helped by the campaign he said: "These are people who were once perhaps, neighbours, parents or friends.
"These are real people and they're not statistics. We have to by the nature of our jobs work with statistics, but these are real people.
"Across the UK as a whole there are 24 million people with debt in credit products but behind those statistics the people have very different demands.
"This requires us to get under the skin of a series of complex problems. In order to be truly effective as a regulator we have to look beyond our own four walls and what might normally be expected of us as a regulator.
"We authorise, we supervise and we enforce. We can intervene and propose new rules where they're needed.
We can work with others and address failure. We can also invoke competition and innovation in the interest of consumers."
Michael said that those struggling often had to take out high-cost credit because just to get by and afford everyday essentials.
"People often say: 'Well if someone can't afford something, they shouldn't be paying for it.'
"But people have told me: 'in order to travel to a job interview, I had to get a bit of credit' or ;my child has a disability, in order to cover just basic needs I have to go into debt'.
"More and more, this is about people needing to pay for basic needs."
He told the newspaper that he was using a "significant" amount of his own cash to fund the campaign and hopes that other wealthy individuals will throw their support behind the campaign.
Over 7 million households turned to high-cost credit such as doorstep lenders or rent-to-own firms last year.
Like grandmother Tracey Jeans, 50, who lives in Edingburgh and has been a customer of Provident for 32 years.
She has just £40 a week to live on and pay bills after the repayments on her three loans.
MORE ON STOP THE CREDIT RIP-OFF
Rent-to-own purchases have an interest rate of up to 99.9 per cent and typically last three years, meaning customers frequently pay much more than double the original item price.
Doorstep loans can come with interest rates of up to 1,557 per cent, according to Citizens Advice.
And the problem with high-cost credit is growing.
Last week, City regulator The Financial Conduct Authority, warned that household debt is close to the peak seen in 2008 - which played a part in the credit crunch caused by the banking crash.
Bank of England figures show consumer credit for last year was more than £200billion up 9.3 per cent on the year before.
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