Loan sharks circle poor

loan sharkStuff.co.nz 21 December 2013
Christchurch’s most at-risk residents are being targeted by dodgy lenders and by mobile-truck shops, with some scouting for sales outside welfare agencies, the City Missioner says.

Michael Gorman is calling for tougher laws on high-interest payday loan companies after a resident visited the City Mission seeking help for what he says was “one of the worst loan schemes we’ve ever seen”.

He also sought a tightening of rules around mobile-truck shops, saying his staff frequently noticed lenders parked up outside the building trying to attract customers.

Mission social worker Connie Smart said a desperate mother-of-four recently visited the mission unable to repay a credit from an online short-term loan company.

She had borrowed just over $500, but was faced with an annual interest rate of 584 per cent, to be paid over three weeks – accruing her almost as much as she borrowed in interest.

A clause in the contract granted the loan company legal power of attorney to take 20 per cent of her income directly from her employers if she defaulted on a payment, until the loan was paid.
http://www.stuff.co.nz/the-press/news/9542137/Loan-sharks-circle-poor

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