Debt advice charity partnership Capitalise has condemned loan company Provident for a Christmas campaign that urges cash strapped Londoners to take out loans with sky high interest rates.
In a letter posted to some of the capital’s poorest residents, Provident is offering up to £500 cash at a typical annual interest rate of 183% APR. The usual interest rate for credit ranges between 15% and 30% APR.
In its Christmas marketing letter, illustrated with holly and a Christmas cracker, Provident says ‘tenants and unemployed welcome to apply,’ and adds ‘you know we really are here for
66 year old former lorry driver and Capitalise client Alfred Jones from Romford owes Provident £5700 and is typical of a steady stream of people Capitalise helps who are unable to pay back Provident loans.
“When my children were still at home I borrowed from Provident to pay for basics like clothes, food, gas and electricity,” he says.
“Then a couple of years ago, the company I worked for went bust and I borrowed from Provident to try and keep up payments on my mortgage. I borrowed from them because it’s easy. You phone up one day and they come round the next with the cash.”
Mark Allen, Head of Progammes at Capitalise, said: “Provident lends money at crippling rates
of interest not dissimilar to those charged by illegal loan sharks. The company’s Christmas campaign is a cynical attempt to prey on people at a time of year when they are at their most vulnerable, struggling to buy gifts for their children and cover other seasonal expenses.”
Provident uses local agents who often provide loans to friends and neighbours and collect repayments weekly.
Capitalise is a London-wide partnership of charities and advice organisations that provides free face-to-face debt advice across the capital to help people take more control over their finances.
The programme’s 58 debt advisers are paid for by the government’s Financial Inclusion Fund.
NOTES TO EDITORS:
1. Capitalise is a Toynbee Hall project. Toynbee Hall produces practical innovative
programmes to meet the needs of people in East London, improve conditions and
enable communities to fulfil their potential. www.toynbeehall.org.uk
