Usury in the UK

A UK Parliamentary committee blasted the Office of Fair Trading -- a consumer watchdog agency that is supposed to regulate moneylenders -- for doing effectively nothing to curb the growth of usurious, predatory moneylenders who attack poor and vulnerable people. There are 72,000 consumer credit firms in the UK, some chargin annual interest rates of 4,000%, but the OFT has never fined a single firm for breaking lending rules. On some rare occasions, it did shut down firms, but did nothing to stop them from reopening immediately under another name.

This week the charity Citizens Advice said it knew of cases where loans had been given to under-18s, to people with mental health issues, and to people who were drunk at the time of securing the loan. One client who took out a £50 loan was targeted with emails and texts offering more cash and ended up with debts of £800.

"Some of these lenders use predatory techniques to target vulnerable people on low incomes, encouraging them to take out loans which when rolled over with extra interest rapidly become out of control debts," the committee's chair, Margaret Hodge, said. "Meanwhile, the OFT has been ineffective and timid in the extreme. It passively waits for complaints from consumers before acting."

PAC's report said the OFT lacked information on how much lending was being done by each firm, and about how different people used consumer credit. A study commissioned from the National Audit Office suggested the scale of consumer harm was at least £450m a year, but the OFT was accused of lacking detailed information on the types of harm suffered by different groups of borrowers.

OFT criticised over 'ineffectual' payday loans policing [Hilary Osborne/The Guardian]

(Image: La Danse macabre, Guy Marchant/Wikimedia Commons)


  1. Quick, somebody get the Sex Pistols some conservative pinstripe suits and let’s do this…

  2. I would like to see a law enacted that would nullify any debt that was illegally initiated or contained usurious terms. I could then accept the illegal robocall credit card, run it to the max and tell the company what they could do with their telemarketing scheme. That would do more than anything to put illegal lenders out of business quickly.

  3. Fascinating how the most notorious surveillance state in the West is somehow unable to use its databases to flag when a serial conman files new incorporation papers. 

    1.  It’s not illegal for serial conmen (conpersons?) to incorporate a new company – only if they are disbarred as directors.

  4. ” attack poor and vulnerable people.”

    Do they use cricket bats or simply beat people with their fists until they sign up?  Do they physically drag customers in off the High Street and tie them to chairs until they sign up or are they just offering something that no intelligent person would use but are flourishing nonetheless.  Is it really society’s problem to protect stupid people from their own actions? 

    1. While your concerns sound valid, it couldn’t hurt for you to expose yourself to a counter-argument: Check out “Debt: The First 5,000 Years” by David Graeber.

      Debt is now a consumer good much like any other. I survived without it for decades, but it is now nearly impossible to live without it. It is not unreasonable to expect that my safety as a consumer be considered when a complex product is sold to me. We do not live in a Libertarian Utopia.

      It should also be understood that just as I take a risk in incurring debt and may lose my shirt, the lendee also takes a risk and may lose their shirt. But these financial institutions have removed their risk by meddling in the laws that govern their own market. What motivation do they have to compete or innovate now when they can simply enslave the unwary?

    2. People who are desperate for money because their society has decided they don’t need to be paid a living wage are then further exploited by predatory lenders charging outrageous usurious rates… and that is just okay with you.  I get it, you are a libertarian, you don’t believe there is such a thing as capitalist predation on the desperate and needy.  But we don’t live in your idealized world, we live in the real world where people really need money or they don’t eat, don’t have a place to live, or don’t get medicine they need to survive.

      But you are above all that need and desperation, we get it.  

      For all your superiority I guarantee that you, unless you are a lawyer trained in finance, would have a hard time understanding the contracts that govern these predatory transactions.

  5. Before clicking the link, I knew there would be at least person in the discussion that would defend usury. I wasn’t disappointed.

      1. I was thinking more along the lines of “adhesion contract” but it doesn’t look right:


Comments are closed.