Islington town hall campaign against loan sharks ‘is just hypocritical’
A town hall campaign against loan sharks has been branded “hypocritical” amid claims residents are driven into their jaws by the council’s own “ruthless” pursuit of debts.
An opposition councillor has slammed the “disgraceful” way the council threatens people with court action over non-payment of council tax or eviction over rent arrears.
Cllr George Allan insists these practices are the reason many people end up taking out payday loans at astronomical rates of interest or even resorting to loan sharks.
He is calling on the council to conduct an investigation into just how many people are driven into their hands.
He said: “Islington Council is an oppressive and ruthless creditor. How many people are borrowing from payday lenders and loan sharks to pay off debts being heartlessly enforced by the council itself?
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“It has some of the most effective and ruthless debt collection methods at its disposal of any creditor.”
The council recently campaigned to raise awareness of the dangers of borrowing from loan sharks and payday firms, following the recommendations of its flagship Fairness Commission initiative aimed at reducing inequality.
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It also made unsuccessful efforts to ban payday lenders from the borough. Yet the council often heaps the greatest pressure on debtors, Cllr Allan says, because unpaid council tax is one of the only debts that can lead to a prison sentence, while rent arrears can result in eviction.
He says tenants often end up caught between these two threats – being pursued by different council departments – and having to decide which is the lesser evil.
“I would say this is pretty normal,” he added. “The council pursues people relentlessly, just like a loan shark. There’s definite hypocrisy there.”
He has been supporting one tenant who says she has felt bullied by the council.
Cllr Allan says she got into rent arrears when the council incorrectly deducted �440 from her housing benefit payments. Mother-of-one Antoinette Ward, 51, of St John Street, Finsbury, said: “They’re the worst creditors of all – they can click their fingers and take you to court.”
Islington Council’s executive member for finance, Cllr Richard Greening, sought to dismiss the comparisons with loan sharks by highlighting the fact that no interest is charged on council tax or rent arrears.
He added: “Obviously we have to collect money in order to fund public services and people expect us to be firm but fair.
“We are working on bringing different debts together, rather than having lots of different departments pursuing people.
“Clearly where people can’t pay, we have to be reasonable. If people are feeling they have to resort to payday loan companies, that would be a significant concern.”
The council did not respond to questions about how many people have been threatened with eviction or court action over their debts.