This is a vitally important report, drawing attention to a serious and growing challenge. In recent years there has been a welcome focus on pay-day lenders, but, as this report shows, the proliferation of “home credit” and “rent-to-own” should be just as troubling.
Those making use of such credit come from all walks of life, but the costs of credit tend to fall disproportionately on those on low incomes. With the increasing normalisation of such sources of credit and low levels of knowledge about alternative sources, action is clearly required, and fast.
These forms of credit have, thus far, largely escaped attention, but this report turns a spotlight on the issue and must be the beginning of a movement for change.
In Wales, where six percent of the population make use of high cost-credit, the Welsh Government have developed strategies for financial inclusion and capability. It is vital that these strategies are implemented, not just in Wales but across the United Kingdom, along with the other recommendations of the report.
The Port Talbot Credit Union, in my constituency, is a excellent example of fair and ethical lending. We must ensure that awareness is raised of the services that the CU offers, so that all those who are potentially vulnerable to high-cost credit are able to make better choices.
The full report can be downloaded here