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Peter Black and South Wales West Liberal DemocratsRepresenting Aberavon, Bridgend, Gower, Neath, Ogmore, Port Talbot, and Swansea |
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Assembly Member shocked by 183.2% credit offer
June 5, 2008 12:00 AM
The Welsh Liberal Democrat Social Justice Spokesperson, Peter Black has condemned a personal loan offer received by one of his constituents which comes with a typical APR of 183.2%.
The constituent passed the advert to Mr Black after receiving it in the post as unsolicited 'junk' mail. 'Provident Personal Credit' state that a loan of between £50 and £800 is available. Mr Black contacted the company and discovered that the total re-payable on an £800 loan over 56 weeks is a staggering £1,344 with repayments of £24 a week, a charge of £544. The advert also states that the unemployed are welcome to apply.
The most expensive loan detailed on a price comparison website charged almost a third of the price and had lower monthly repayments. The total charge was £191 instead of £544, and this was for someone with a 'poor' credit rating.
"This advert tries to convince people of the affordability of loans by disguising the repayments as weekly," said Mr Black. "It is incredibly irresponsible to invite someone who is unemployed to apply for a loan which they would struggle to repay. £24 a week is £98 a month."
"My concern is that with credit from legitimate lenders becoming increasingly hard to come by during the 'credit crunch', those who need cash will be forced to turn to companies such as Provident. They are preying on the poor and attempting to disguise an incredibly uncompetitive product as fair value."
"I would urge anyone contemplating one of these loans to instead contact a debt help organisation or their local Citizens Advice Bureau who may be able to help them."
ENDS
Notes: Quote from Provident Personal Credit:
Loan amount £800. 56 weekly payments of £24. Total amount payable £1344.
Most expensive loan advertised on money supermarket website (UCC Loans):
Loan amount £800. 12 monthly payments of £82.59. Total amount payable £991
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