Tuesday, October 23, 2007

Jaws 6: the return of the sharks

The weak and vulnerable in society are always the most likely to fall victim to people determined to profit from their vulnerable status. There have been plenty of warnings of fraudsters and loan sharks who charge exorbitant rates of interest to people desperate for some cash. In fact, at the beginning of the year Gordon Brown announced the nationwide extension of an anti-loan shark scheme. This involves giving advice and prosecuting people who are unlicensed money lenders offering illegal loans and threatening people.

However another dangerous but perfectly legal shark has now appeared on the scene and apparently neither the government or anybody else appears to object to their operations despite them charging interest rates that would make loan sharks envious. The first example is a company involved in the mortgage/remortgage business. They have been recently advertising a service where anybody who is in the process of a remortgage application to release equity can get hold of 50% of the debt free equity within 48 hours. After the mortgage process is completed, they pay back the loan plus 1% per week of the borrowed amount. That is a scandalous 52% rate of interest.

Another example I came across was a company offering loans via radio advertisements. At the end of the advert where they have to declare the APR by law, the figure was given as one-one-eight-eight percent. That is exactly how it was read out. That's not 1.188%, not 11.8%, not 118.8% but a staggering 1188% interest rate. I suppose they think people will not be able to figure out that one-one-eight-eight equals one-thousand-one-hundred-and eighty- eight. Where the hell are the authorities who are supposed to be policing this sort of thing? Probably busy planning now to prevent legitimate anti-war protesters embarrassing war criminal politicians or how to fit up some Asian teenager as an Islamic terrorist for surfing the internet for information supplied by Mossad.


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