COMMERCE and Employment has ruled out legislation on loans. Chief Minister Mike Torode has criticised companies which he said were ‘charging exorbitant fees’ and said they should be regulated.

He said that loaning money to people who were unlikely to repay it was immoral.

The department said that legislation was not appropriate at present.

It said that a significant proportion of the debt problems among local people stemmed from UK companies offering loans online.

‘For this reason, along with the significant resources required to implement controls, the introduction of legislation is not justified at this stage,’ it said in a report.

It believes that more information on interest rates and the total cost of credit, combined with education, were the first steps to alleviating debt problems.

‘This follows the approach adopted in the UK. The department has been working closely with the Citizens Advice Bureau and is pursuing this approach through the Social Policy Steering Group.’