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Interest rates of up to 800 per cent prompt Government crackdown on loan sharks

Loan sharks offering easy money but with excessive interest rates are facing a crackdown.

The Government has announced measures to counter predatory behaviour aimed at the poor.

It today released a review of New Zealand's lending laws, with options on how to fight irresponsible lending.

These include capping interest rates and fees, increased licensing or registration for lenders and strengthening enforcement and penalties for irresponsible lending. 

Commerce and Consumer Affairs Minister Kris Faafoi says there needs to be a crackdown on lenders. 

"What's happening is when a $500 loan can become several thousand because people can't pay them back, It takes those consumers far too long to get out of the debt spiral and they need protection," he said.

In 2012 1 NEWS revealed families were getting into tens of thousands of dollars of debt with mobile truck shops. 

Minister Faafoi says he's heard of some companies charging interest of up to 800 per cent. 

"That just can't go on. I think New Zealanders will be appalled by that," he said.

The options are out for public consultation for five weeks.

Then the minister wants to see changes moved through quickly, hoping to see legislation in the House by the end of the year. 

The measures are to counter predatory behaviour aimed at the poor. Source: 1 NEWS