Newtown group goes fishing for loan sharks

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Mon, 11 Jul 2011 7:00p.m.

Finance companies can charge in excess of 30 percent interest

Finance companies can charge in excess of 30 percent interest

The Wellington suburb of Newtown is diverse, colourful and low income. It is classic loan shark country.

Mark Barnard is one of the founders of a group called Debt-free Newtown.

For him, the fight to curb high-interest loan companies is personal - he has had friends financially marked for life by them.

A so-called mainstream loan company like Instant Finance knows its target audience - low income and many of them Polynesian who know Stacey Jones for his exploits on the league field. He is a winner and a success story: The ideal guy to front its business.

It is those who lack or are without money who use companies such as Instant Finance, and they pay a high price for the money - up to 30 percent.

The vulnerable being preyed on by the unscrupulous - that is how politicians have defined the extreme companies of the finance industry.

Instant Finance promotes itself as one of the good guys, but Labour says interest rates of 30 percent are too high, and it wants rates capped much lower than that.

Watch the video.


Do you think interest rates should be capped? Have your say here.

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Comments

12 Jul 2011 07:26p.m.

Sally wrote:

In response to the porse parents - why is it that people must always find someone to be held accountable, even for something that is an accident (although a somewhat preventable one here perhaps). It is outrageous to think that Porse should have to compensate for a parents loss of wages! Liability insurance for caregivers? Where will it all end. If you want the best care, peace of mind and your children to be kept 'safe' stay at home and look after them yourself!!! Do not blame people who are only trying to offer a service and that have the best of intentions!!! Thanks, Sally.

12 Jul 2011 02:24p.m.

Hess wrote:

Typical nannying government interference in the marketplace, nothing more nauseating than a self righteous do gooder.

12 Jul 2011 01:19p.m.

RCHP wrote:

Good on you John! This is such an unjust and predatory industry. Really good to have it highlighted for once!

12 Jul 2011 11:51a.m.

taz wrote:

Money Loan "Shops" have been around for years. They are all nothing but Sharks, preying on their targets of lowere socio-econoimc background, nation-wide people everywhere. Benificiaries, single parents, Maori, Pacific Island people, whoever really! So glad I've NEVER personally sucubmed to these people, in over 16 years, having walked past many of their places, time and time again. Especially anywhere out here, in West Auckland. Pawning off personal property for money, charged exorbinate interest rates to get them back, if not affordable to you personally, quite possibly gone and lost for ever, therefore charing up more and more debt, to which defeats the whole purpose of which you went to them in tghe first place!

12 Jul 2011 11:29a.m.

Amy wrote:

I think that John did a fantastic job at highlighting a serious issue in our society. I did however find it laughable as I watched this report online that TV3 has choosen to advertise yet another 2 Loan Shark G.E Money and Credit Union as their pop up ads on the side of this fantastic report

12 Jul 2011 11:27a.m.

m cash wrote:

Amazing how labour are bleating when the problem existed during 9 long years of more and more ministers at the public trough.Now national have gotta fix it over night.
Shame labour shame.9 years with your heads in the sand and now you wanna be leaders, I dont think so!

11 Jul 2011 09:39p.m.

Mandy wrote:

Good interview with the CEO @ Instant Finance. However, I find the reporting on this subject of loan sharks recently very onesided as I don't hear mention of the thousands of defaulters! There are so many clients of finance companies out there who have run off without paying! Many left NZ for either Australia or the Pacific Islands and I know for a fact that many use more than one name! Goods and or vehicles used as security for loans have also left the country or have been on sold. I can assure you this is a market frought with problems for the establishment lending the money.The clients only want to hear "yes we will loan you the money today" as they have a very urgent need right at that moment.These people are reactive, they are not planners and are not keen on budgets! The many reasons for loans include a funeral overseas, a funeral in NZ,car repairs for the WOF,car regisrtration, rent or mortgage arrears,power arrears, a family member returning to the Islands, a payment to the church for the Minister's holiday or the Minister's car or his new furniture. I know of one church where the Minister gets gioven $30k for an annual holiday and every year new furniture etc!I would also like to see the Pacific Island Churches in NZ starting to take some responsibility. Also an MP like Sua William Sio ammuses me when he is vocal re the loan sharks. He knows the Samoan culture, why can't he provide the answer to solve this problem, where is the money going to come from to pay for the funeral?

11 Jul 2011 07:29p.m.

Wolfman wrote:

I cannot believe that Labour Woman who said it's too little too late, and in the same sentence said in the last years there had been 3 enquiries inti this, so that means one or two of them happened under their watch, so why didn't they do something about it. Remember you silly woman, you had nine years to fix the problem.