By Cian Molloy - 22 March, 2020
"We fear moneylenders will end up targeting people who will just not be able to repay loans at the exorbitant interest rates they are charging," says SVP president Kieran Stafford.
As the economic slowdown caused by the Covid-19 pandemic starts to bite, the Society of St Vincent de Paul (SVP) has warned that some moneylenders are lining up to take advantage of vulnerable and desperate people on low incomes.
SVP national president Kieran Stafford said he was outraged when he learned of a national leafleting campaign by one moneylending service.
“You just have to question the timing of these leaflet drops,” he said. “Everybody in the community is putting their shoulder to the wheel. There has been such a surge of people pulling together but unfortunately, we fear moneylenders will end up targeting people who will just not be able to repay loans at the exorbitant interest rates they are charging. It appears to be ‘outrageous opportunism’ seeking to exploit vulnerable people during the coronavirus.”
At present, it is reckoned that there are some 330,000 people in Ireland borrowing money from moneylenders, who charge a much higher interest rate for borrowing than do traditional financial institutions such as banks and credit unions.
In the past, the SVP has regularly called for a statutory maximum cost of credit which can be charged by a moneylender and that consumers should have better access to sources of low-cost credit. This could be achieved through the introduction of a statutory interest rate cap.
Last year, the society also called for ‘tobacco-style’ warnings about the high cost loans charged by moneylenders should be placed on all money lenders’ advertising and promotional material.
Separately, the SVP welcomed the introduction of the new emergency pandemic payment and confirmation that low-income working families can continue to receive vital benefits, like the Working Family Payment, if their hours are reduced. The society has asked the Social Protecition Minister to extend fuel allowance until the end of April to help families with additional heating costs due to self-isolation.
“The Department of Social Protection has engaged positively with our recommendations on supporting low income households through this crisis,” Mr Stafford said. “We know that their staff are working very hard to ensure people can get the income supports they need, and we would like to acknowledge and thank them for their hard word. Throughout the crisis we will engage with the Department to ensure no one falls through the cracks.”
Additionally, the society commended the measures implemented by utility companies, such as Electric Ireland, and the Energy Regulator early this week. All companies have suspended disconnections and pay-as-you-go gas customers will have emergency credit of €100 during the Covid-19 crisis.