London (seek.uk) April 29, 2006: The sixteen month long investigation conducted by the Competition Commission has come up with some startling facts. One of them is that people who have availed doorstep lending over the last five years have ended up paying whopping £500m as premium to the lending agencies.
Provident Financial, Cattles, S&U and London Scottish Bank are among the main culprits who have been charged with hiring local agents, most often middle aged women for doorstep lending. These women offer loans to people at their homes at an interest rate as high as 900%APR. Poor people are their soft targets as they don't have enough mean of credit borrowing.
These doorstep lenders lend less than £500 but usually more than £300. Beside this these lenders don't even check with credit reference agencies about the credit record of the people.
Chairman of the Commission Peter Freeman showed his concern over the whole matter. He stated, "Customers value home credit because it suits their needs very well but the fact is that they are paying too much for it. We are not trying to kill this industry but there is a serious lack of competitive pressure in the market leading to a poor deal for consumers
Provident financial one of the major culprits, which has a share of 60% in the lenders market has defended itself and strongly opposed the Commission. It has sent more than 100 submissions to the inquiry.