BEWARE THE ‘LEGAL LOAN SHARKS’

RMT helpline 0800 376 3706 :: january 2012 :: RMTnews 20 A new report by a group called R3 has found that 45 per cent of the population struggle to make it to pay day each month before running out of cash and that 3.5 million adults are considering taking out a pay-day loan in the next six months. Pay-day loans provide access to small sums of money until a person’s next pay-day, but are controversial because of the rate of interest they charge which can, in some cases, be over 4,200 per cent APR. However RMT Credit Union chairman Mick Lynch, addressing this year’s Credit Union’s AGM at Unity House, said that the unions set-up was a mutual loans and savings co- operative which was safe, trustworthy and with the most competitive interest and loans rates around. He warned that pay-day companies were preying on the misery caused by the economic crisis. "Our advice to someone thinking about taking out a pay-day loan is, don’t do it. "Credit unions in Britain already help nearly a million people to manage their money and they only exist to do this, not make a profit for outside shareholders. “The RMT Credit Union is run by RMT members for RMT members, so join today,” he said. R3 president Frances Coulson also warned that payday loans were not the best way to resolve debt issues and often led to “escalating financial problems”. The companies all have friendly names like Wonga, PayDay UK and Kwikcash but they have very unfriendly interest rates including Wonga.com which has a representative APR of 4,214 per cent. The Consumer Action Group reported one case of a £400 pay-day loan which could not be paid back and which one company refused to discuss with the victim until the borrower received a debt-collection demand for £3,424. Labour MP Stella Creasy is campaigning against what she calls ‘legal loan sharks’ and introduced a bill to deal with them, but did not gain government support. “These companies are just popping up from nowhere and it’s all completely legal. “There are millions of people who can’t make ends meet and lack of regulation means they’re prey to loan sharks like this,” she says. For more information about the RMT Credit Union and its products go to the back of this magazine or, better still, join up today. RMT WARNS BEWARE ‘LEGAL LOAN SHARKS’ RMT’s Credit Union held its annual general meeting last month amid the growing scandal of pay-day loan companies like Wonga.com charging interest rates of over a staggering 4,200 per cent Credit Union AGM: Watch the video on RMTv at rmtv.org.uk