Legal Loansharking: organising for change

26th July, 2012 11:50 am

Today, Ed Miliband visited Walthamstow as part of his Real Change to Win tour to see how Labour and Movement for Change activists are working within local communities to take practical action on the issue of “legal loansharking”.

As a Community Organiser at Movement for Change, I’ve worked with local activists across the country to run listening campaigns which identify issues of real concern in their communities. Time and again, the misery associated with high-cost credit, debt and related poverty have been raised with us. We’ve heard testimony as to the devastation that spiralling debt can cause to individuals and families, from areas as diverse as north London and Lancashire. Movement for Change activists have also begun ‘mapping’ their High Streets, identifying where these companies are operating and working to highlight any infringements of existing regulations.

The lack of regulation of the high-cost credit market is one important factor which allows this problem to spread. Led by Stella Creasy MP, Labour activists and councillors have been calling on the Government to introduce caps on the cost of credit, to ensure we have comparable protections to those already well-established in many other countries. But there are other steps that we can take, by acting collectively at a local level. Several Labour and Co-Operative councillors are exploring innovative ways to prevent the further spread of legal loanshark companies in their wards. Meanwhile Movement for Change activists are working to build support for local alternative providers such as Credit Unions, and organising Action Days to strengthen relationships between local community institutions and debt-advice bodies. In Wembley, we’re even putting pressure on the F.A. to show leadership in tackling the spread of advertising by these high-cost credit companies, as part of a wider “Show Wonga the Red Card” action.

Today’s community event was attended by dozens of residents from across London, who share a passion for action rather than words to tackle this problem. Stella Creasy unveiled a summer Campaign Pack, which includes a training offer from Movement for Change. Using the practical tools of Community Organising, over the coming year we will support and develop local activists across the country, starting with the Co-Operative Party’s Summerfest next weekend. For more details, visit our website and get in touch.

Kathryn Perera is Chief Executive of Movement for Change and a member of the Labour Women’s Network national executive.

  • Walter Ulbricht

    In the meantime, Labour grassroots were calling for this kind of regulation years ago after seeing it on the doorstep, but were no doubt denounced by the Blairite hacks now running Movement for Change.

    • treborc

      Two charities in my area wrote to the leader who was Brown the reply was  they fill a niche in the market.

      Labour did tell us that loan sharks people not registered to give money or took peoples  benefits , like debit card as security were illegal,  but it was like drawing blood from a stone

      In my area we now have a number of these short term lending who knock on doors or send you leaflets with 1700% APR  and you have to put up security which normally ends up being a debit card.

      Venture capitalist Adrian Beecroft, a major donor to the Tory party,
      having handed over £593,000 since David Cameron became leader. Mr
      Beecroft is chairman of Dawn Capital, which has a large stock in Wonga
      Group.

      I doubt to much will be done for the next few years, problem is of course will they do the same if Labour wins…. it is all about donations and money

  • Dugald

    Good on you guys for trying to do stuff about this awful issue.  And bad cess to all those, including those in the Labour Party, who don’t see this as an important issue.

  • ThePurpleBooker

    I am huge fan of community organising and it is great David Miliband hads launched Movement for Change and that Ed Miliband is working on it too. Thanks goes to Maurice Glasman and Arnie Graf. We need to have action as well as new policies to tackle this problem;- A cap on the cost of credit, so it will be illegal for companies like Wonga to charge extortionate amounts;
    – Regulation of these loan sharks not be allowed to provide their services to those on benefits, so that they cannot rip off those reliant on welfare;
    – A levy on the payday loan companies and investing that money to fund support for debt advice services;
    – Mutualise the Royal Bank of Scotland and use the money saved to fund tax incentives for customers of credit unions, building societies and ethical banks to encourage others to move their money;
    – New rules to allow communities to remove payday loan companies from their local area;
    – A ban on advertising for payday loan companies;
    – Breaking up the National Savings and Accounts Bank into a chain of regional banks to provide alternative credit and investment for communities;
    – Turning the Post Office network into a mutualised National Credit Union network, which will work with other credit unions and is democratically run by communities rather than central Government;
    – More deregulation for credit unions and financial co-operatives.

  • JC

    What’s wrong with credit unions? Surely if companies like Wonga are operating in the area, then there is an obvious opportunity for the community to set up a credit union and provide low cost loans. The government won’t do it for us, we have to do it ourselves. Surely this is what the Labour Party was set up to do.

  • Pingback: Sharkstoppers: the consumer activists curbing the excesses of payday lenders | Kathryn Perera - Government Tenders, Government News and Information - Government Online()

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