Crackdown on rogue lenders

Consumers are being targeted by a host of new companies

New laws are to be proposed by the government on Wednesday to try to crack down on credit companies which charge extortionate rates of interest on loans.

Figures show that consumers have been borrowing record amounts over the past six months, tempted by a host of new companies apparently offering cheap credit.

Consumers are meant to be protected from extortionate loan rates by the Consumer Credit Act drawn up in 1974.

But there is evidence some people are being forced to repay up to 10 times the amount they originally borrowed.

Citizens Advice Bureaux say people who are already deeply in debt are still being targeted with offers of cheap credit.

One anonymous client was able to take out up to £58,000 in unsecured loans from different companies in a four-day period.

There are other reports of consumers being charged as much as 1,800% annual interest.

The new proposals are designed to make it easier to track down rogue lenders and challenge unfair loans in court.

Out-and-out loan sharks will be shut down altogether.