Driven by the desire to fight unfair credit providers that lump the public with practically unpayable high-interest loans, actor Michael Sheen has launched a campaign this week to defeat the poverty premium exacerbated by such lenders.
The End High Cost Credit Alliance, founded by Sheen himself, brings in a number of social enterprises, lending watchdogs, politicians and charities to both raise awareness of fairer lending initiatives and tackle financially crippling interest dished out by credit lenders.
For millions across the UK who don’t have access to mainstream credit options thanks low or fluctuating incomes, the appeal of high-cost lenders seems convenient, but is often a doorway way to further debt thanks to high interest rates and tough repayment terms. Last October, one such high-interest lender – BrightHouse – was ordered to repay almost £15 million to customers after the Financial Conduct Authority found the agency failed to act as a responsible lender.
It’s the culture of organisations like BrightHouse that Sheen and his Alliance want to tackle. He describes the Alliance as a movement to pool experience, expertise, and resources to try and make a real change and create a fairer deal for the people who need it. His dedication to tackling problem debt has been inspired by witnessing difficulties faced by friends in the Welsh town of Port Talbot where Sheen grew up.
“This is a really exciting moment of opportunity,” says Sheen, “And with your help we can really make a concrete difference to people’s lives.”
His dedication to tackling problem debt has been inspired by witnessing difficulties faced by friends
The Alliance will also target the education sector, developing plans to ensure financial education is embedded in schools across the UK. Universal credit and the government’s welfare reform programme are also in Sheen’s sights.
“His dedication to tackling problem debt has been inspired by witnessing difficulties faced by friends in the Welsh town of Port Talbot where he grew up, a region struggling with the decline of the local steel industry,” says The Alliance.
Sheen’s attention turned to Scotland in January, when he back the launch of a Carnegie UK £1 million fund to tackle the poverty premium for low-income borrowers in Scotland. The Carnegie UK Trust’s Affordable Credit Loan Fund is aiming to offer an alternative to people who have nowhere to turn when they are in dire financial straits – other than high interest credit companies and doorstep lenders.
For the Alliance, the wider notion of fair finance means the provider of that finance, such as BrightHouse, is not unfairly targeting consumers with a product they just can’t afford. “We believe credit is a good thing when delivered fairly and responsibly,” the Alliance’s manifesto claims. “For those people where credit is not the answer, there should be other support systems in place, a strong safety net.”
Big Issue Invest has invested in ethical personal lenders, Moneyline, Fair For You and Street UK.
In Parliament, The Big Issue founder John Bird has introduced the Credit Worthiness Assessment Bill in a bid to help millions of lenders get access to fair credit and to prevent society’s poorest being clobbered by the poverty premium.