Hollywood star warned crusade could force Brits towards illegal loan sharks
Britain's second-biggest sub-prime lender today hit back at Welsh Hollywood star Michael Sheen and his crusade to clamp down on the home credit sector.
The End High Cost Credit Alliance, founded by the star of Alice in Wonderland and the Twilight Saga, is campaigning for "a fair, affordable credit product".
High cost credit is unfairly targeted at those that can least afford it, the movement says. It has joined forces with The Sun newspaper to "stop the credit rip-off" and crack down on the sector.
But Morses Club, a home credit business with 229,000 customers and 2,050 agents across 98 UK locations, warned such restrictions could see many people forced into using illegal loan sharks instead.
Read more: "Utterly impossible" for Provident to change its path, says rival Morses
“The likely unintended consequence of restricting access to HCC [home consumer credit] lending will be that many individuals will be forced to turn to unregulated lenders charging punitive repayment terms, which will remove any ability to regulate or control consumer debt," Morses chief executive Paul Smith.
Britain's sub and near sub-prime sector is estimated at more than 10m adults. Often people are turned down for loans by traditional clearing banks for relatively benign reasons such as being self-employed, poor credit histories dating back many years or being slapped with an increasing propensity to dish out CCJs.
Firms like Morses, Provident Financial and Non-Standard Finance all have a valuable role to play in meeting such demand, the firms say.
Smith welcomed calls for greater transparency and even regulation, adding:
But we also call on parties on all sides of the debate to recognise the reality facing individuals who rely on the HCC sector today.
Indeed, according to the England Illegal Money Lending Team (IMLT), it is estimated that 310,000 people are using illegal money lenders, which equates to a staggering three individuals for every 10 customers of regulated HCC firms.
Read more: Provi plunges as rights issue goes live
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