8 December 2006
Politicians have slammed a credit company for exploiting the victims of the Farepak collapse by offering them a loan which charges a whopping 177% interest rate, a charge which one MP branded as "nothing more than legalised theft".
Jim Devine, Labour MP for Livingstone, raised the issue in the House of Commons yesterday, heavily criticising Provident Personal Credit for its misleading slogan, "make your Christmas more affordable".
"Provident Personal Credit is targeting hard-working families who were caught up in the Farepak scandal," said Mr Devine.
"They are saying to them 'make your Christmas more affordable' but the typical APR is 177 per cent. It's about time we put a cap on these companies because this is nothing more than legalised theft," he continued.
His concerns were echoed by leader of the House, Jack Straw, who commented: "When [Mr Devine] gave me a copy of the leaflet, I thought the APR was a misprint, but it is not. I notice the small print also claims there are 'no hidden charges' - on an APR of 177%. This is a very serious issue."
Approximately 150,000 Britons, the majority of whom were low-income families, lost around £400 each when Farepak went into administration in October.
Louise McDaid, 42, chairwoman of the Ayrshire-based Farepak Victims Committee, told the Herald newspaper: "I think the stress everybody has suffered will put a dampener on their Christmas."
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