[holding answer 22 March 2010]: Research carried out for the DTI by Policis in 2004 gave an example of an APR in the legal home credit market of 497 per cent. The Competition Commission investigation of the home credit market in 2006 stated that APRs in the home credit market range from 150 to 500 per cent. One of the remedies introduced by the Commission was the requirement for all home credit providers to include their products on a website, lenders compared, to enable customer comparison of prices. The Joseph Rowntree Foundation reported that the break-even APR for a not-for-profit home credit company was between 123 and 129 per cent. The OFT is reviewing the high cost credit market, including the home credit market, and they will report shortly.
The Department commissioned a research report into the scope and extent of illegal money lending in the UK by Policis and the Personal Finance Research Centre (PFRC) in 2006. The total cost of credit charged by illegal money lenders was on average £185 per £100 advanced, approximately three times the cost of credit from the highest cost legal lenders and more than double what people expected to pay. Loan sharks’ interest rates can vary from 500 per cent. up to as high as 11 million per cent. in some extreme cases.