Loan sharks targeted in MP's bill

Loan sharks targeted in MP’s billRegulation of loan sharks and the interest rates they charge are the focus of a new member’s bill about to be put into Parliament’s ballot by Labour MP Charles Chauvel. [Stuff Politics]

While Charles Chauvel is grandstanding over this, I mean what else can you call it when you were in government fro nine years and did nothing exceppt watch finance compaies collapse, he should also have a good hard look at Chrisco.

Though not strictly a finance company they nevertheless are taking peoples money and promising to deliver something in the future, though not interest, it is goods. Chrisco claims to be covered only by the outdated Layby Sales Act 1971.

Under those law rather than the Securities Act if a company folds then the depositors into the scheme become unsecured creditors. These institutions are clearly deposit taking. They are also charging fees for management and setup.

If you have a look at the industry around this it appears that two of the three players are seriously preying on the poor. Chrisco and the now defunct Mrs Christmas which went tits up owing $5 million.

Only Hampsta salts away depositors funds in the Public Trust.

There are many more ways to tuck poor people than dodgy loans from dodgy loan sharks and this bill would do with some expansion.

I will blog more on this area of the market as I compile some more research. Suffice to say the situation appears alarming particularly for the biggest player.