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Families turning to moneylenders charging up to 200% interest ahead of Christmas

The majority of loans taken out this time last year were to cover debts consumers already had.

THE CENTRAL BANK has issued seasonal advice for individuals to avoid borrowing money from money lending firms.

In its Christmas advice, the bank has warned people against taking on debt “in addition to their existing loans”.

A problem that was identified by the Bank was that a large number of consumers were borrowing from moneylenders to cover debts that they already had.

Advice

Customers are advised that if they miss repayments, moneylenders are not in a position to charge them extra, and that they should seek advice from the Money Advice and Budgeting Service (MABS). 

Consumers are also encouraged to ensure that if they do go to a moneylender, that the company is licenced by the Central Bank. Moneylenders licenced by the institution are not permitted to keep any amount of a new loan to repay an existing debt.

Director of Consumer Protection, Bernard Sheridan, said, “households often have additional loans to cover these expenses, including from moneylending firms. This could take consumers into a rolling cycle of high-cost borrowing and potential debt.”

The Central Bank has held controls over the moneylending sector since 2003 – in which time it has not permitted an increase to maximum APR.

As of October, there were 39 moneylenders licenced to operate in the Republic of Ireland.

Reaction

The news has been welcomed by Fine Gael South Central TD, Catherine Byrne, who called for tougher regulation on money lenders.

These companies are currently allowed to charge extremely high rates of interest of up to 200%, far in excess of what you would pay with a traditional lender.
People often turn to moneylenders when they are in debt and feel like they have no alternative, but unfortunately these high interest rates can leave them in much deeper debt. The limits imposed on these interest rates must be looked at.

The website for MABS can be accessed here.

Read: Money returned to elderly woman who was conned out of savings

Also: Ireland is less corrupt than it used to be…

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18 Comments
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    Mute skin flint
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    Dec 5th 2014, 7:38 AM

    Pity they didn’t take their own advice 6 years ago!

    126
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    Mute Ho Lee Fuk
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    Dec 5th 2014, 7:50 AM

    Shark warns the seals of the dangers of Killer Whales!

    89
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    Mute E
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    Dec 5th 2014, 8:02 AM

    More like
    Pol Pot lectures jaywalkers on the importance of being a law abiding citizens.

    35
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    Mute Huey
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    Dec 5th 2014, 7:39 AM

    Thank god for these steadfast sentinels of our economy.
    Where would we be without out them?
    €200bn better off?

    83
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    Mute Recalcitrant Banker
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    Dec 5th 2014, 7:49 AM

    People used moneylenders when our economy was much better also. People with cash flow difficulties should always write out a budget and stick religiously to it. It works for homes as much as businesses. I’m speaking from experience here, I did the budgets for Quinn insurance and Anglo when I worked there and look how they’re doing now!

    38
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    Mute E
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    Dec 5th 2014, 7:56 AM

    Illegal moneylenders are the s**m of the earth.
    However they could never cause as much damage, or drive as many people over the edge as our “fine” “well regulated” banks.

    59
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    Mute Sam Bartell
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    Dec 5th 2014, 8:25 AM

    Not to memtion the “legal” door to door lenders that are licensed to charge huge apr’s. And now talk of limited the amount of savings people cab have in credit unions! These fools are nothing but a protective coating for big banks

    32
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    Mute Paul Flynn
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    Dec 5th 2014, 7:40 AM

    Pot meet kettle.

    36
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    Mute Gavin Redmond
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    Dec 5th 2014, 7:50 AM

    Central bank are pushing people to money landers. You would need to have 20k in savings just to receive a 2k loan. Great work as usual from the bank.

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    Mute ohaimhirghin
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    Dec 5th 2014, 8:39 AM

    If we ditched religion in school and maybe educated people in money management instead.

    32
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    Mute David Nolan
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    Dec 5th 2014, 8:19 AM

    We have turned a corner some say, strange that….

    18
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    Mute Daisy Chainsaw
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    Dec 5th 2014, 11:08 AM

    We’ve turned enough corners at this stage that we’re going round in circles.

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    Mute Ruth
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    Dec 5th 2014, 8:50 AM

    You do realise that most of the tat, in fact all, and the heaps and mounds of cholesterol enhancing biscuits and chocolates are totally superfluous.

    Your children will be guided by you

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    Mute Tom Kelly
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    Dec 5th 2014, 11:46 AM

    I love you Ruth

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    Mute Karl
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    Dec 5th 2014, 3:16 PM

    Where can I contact one of these guys. At least you don’t have to tell them what you had for breakfast to get a loan.

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    Mute Denis Reidy
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    Dec 5th 2014, 4:50 PM

    And these leeches will be treated the same in a court of law as our bankers and politicians.

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    Mute pongodhall
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    Dec 9th 2014, 4:54 PM

    When is this money
    Ending carry on going to be regulated?
    A small amount is fair but people will end up in such debt……
    I hope at least is not a violent lot as I have seen this on tv and it is frightening.
    It may sound mean but, I stay within my money, just go without when money runs out as I am terrified of getting out of my depth.

    1
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