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Undercover officers reveal trading shock

PUBLISHED: 20:16 14 November 2001 | UPDATED: 10:50 03 March 2010

AN undercover investigation has revealed Suffolk companies are charging widely varying interest rates for the privilege of borrowing money from pawnbrokers and sell and buy-back schemes.

AN undercover investigation has revealed Suffolk companies are charging widely varying interest rates for the privilege of borrowing money from pawnbrokers and sell and buy-back schemes.

In some cases customers were unaware of the rate of interest they would be charged. Now they are being advised to shop around before entering any deal.

The trading standards investigation was prompted by the rise in consumer debt, which has soared over the last five years. In 1996 the average person owned £501 in store card bills, by last year that figure had risen to £1,622.

National Consumer Week, now on, is focussing on the problems of debt. In Suffolk, trading standards officers wanted to check whether money lending businesses were complying with the law and were offering value for money.

Armed with jewellery and camera equipment, officers visited seven business – three traditional pawnbrokers and four firms offering sell and buy-back deals.

They found pawnbroking businesses, who work under strict regulations, offered interest rates of between 70 and 200 per cent while sell and buy-back traders, who do not operate under the same regulations and don't have to disclose their interest rates, were charging customers between 320 and 684 per cent.

Peter Monk, member of Suffolk County Council's executive committee, said: "While the businesses were not breaking the law, some clearly weren't offering good value for money. Unfortunately, it is the poorest people and therefore those who can least afford to be charged extra, who are the most likely to suffer.

"Suffolk residents should shop around to get the best deal and look at what they will actually be paying before parting with their goods. If they have no intention of redeeming the goods, but are simply using these businesses as a way of getting money, they should think about other options."

Trading standards officers will now be urging the government to amend the law so that sell and buy-back businesses operate under the same regulations as pawnbrokers and are required to state their interest charges clearly, thus making it easier for consumers to pick out the best deal.

For advice on credit deals, hire purchase or other credit agreements call the trading standards consumer advice line on Ipswich (01473) 584358.

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