Legal lenders cry foul over ‘shark’ tag

Published on 01/11/2012 00:00

Payday lenders claim they are being unfairly painted as loan sharks and criminals, leaving consumers confused about the difference between legal and illegal lenders.

The payday lending sector has come under fire for giving people loans which turn out to be unaffordable, rolling over loans and charging annual interest rates running to several thousand per cent.

But short-term loan trade body the Consumer Finance Association (CFA) said the increasing use of the phrase “legal loan sharks” was causing confusion about the difference between its own industry and violent money lenders.

Russell Hamblin-Boone, chief executive of the CFA, said: “We do understand that the payday industry as a whole has some reputational issues but we think the term legal loan shark is confusing and dangerous as the public don’t know who they can trust.”