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'Lenders took double money AND the car'
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Tuesday, 7th March, 2008
Greedy loan companies are charging borrowers interest rates of more than 400 per cent - then seizing their cars when they miss repayments.
The lenders target low-income families and people with poor credit records, offering loans against the their cars. They get customers to hand over their logbook (registration document) until the money is repaid.
If borrowers default on these loans their cars are repossessed.
Father-of-three Alex Robertson, 47, took out a £600 loan with a company called Log Book Loans against his Ford Capri, worth around £1,000.
"He paid back £1,400 but still lost the car.
He said: "I didn't realise the interest rate was 335 per cent until I read the small print. And I was signed off sick for a year, which made repaying the loan almost impossible."
Quarry worker Alex, from Auchtermuchty, Fife, added: "We ended up paying back more than double the amount we borrowed. They got the money AND the car."
Labour MP Kerry McCarthy said: "Loan firms know people are going to default on their repayments and the underlying intention is to get their hands on customers' cars."
Peter Tutton, of the Citizens Advice Bureau, says: "Beware - lenders have an awful lot of power and there's very little consumer protection."
Sources:- http://www.sundaymirror.co.uk/news/sunday/2008/04/06/
lenders-took-double-money-and-the-car-98487-20373571/ |
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