The National Pawnbrokers Association (NPA) has urged the Welsh government to crack down on illegal money lending.
The call for action, which has urged the government to join forces with police and other enforcement agencies, was a result of the NPA responding to the Welsh Government’s consultation regarding its Financial Inclusion Strategy.
Ray Perry, chief executive of the association, said that its members are responsible lenders, and, “unlike other consumer credit products”, customers do not need to worry about bailiffs if they fall behind in debt.
He said the vast majority of people do redeem their items and that independent research has found that pawnbroking loans can be more “affordable than a loan from a high street bank”.
But, whilst NPA members act responsibly and are regulated by the Financial Conduct Authority, the problem of “illegal money lenders who prey on vulnerable people” continues to exist, he said.
He commented that the actions of these criminals are particularly felt during the festive period when families can be under financial pressure.
“That is why we fully support the aims and aspirations of the Welsh government’s Financial Inclusion Strategy,” he said. “People should be given the support and advice they need to make informed decisions which meet their long term needs.”
He stated that the Welsh government is right to do all that it can to stop people being “trapped in a cycle of debt” – but claimed more must be done.
He said: “today, we are calling on the Welsh Government for co-ordinated action with all enforcement agencies, such as the Financial Conduct Authority, HMRC, the Insolvency Service and police forces to crack down on illegal money lending.
“We need a zero tolerance policy in Wales and across the whole of the United Kingdom, towards criminals who pass themselves off as legitimate money lenders.
He added that the campaign will be “stepped up” in 2016 to ensure that more action is taken by the authorities to stop this form of criminal activity.