A COMPANY which offers loans at a staggering 440 per cent APR to “vulnerable households” has been branded “extortionate immoral and exploitative”.

While its practices are legal, Shopacheck has come under fire from civic leaders and consumer bodies after it delivered leaflets to Poole’s Canford Heath estate last weekend which promised residents a chance to “start the summer in style” with a deal that “won’t leave you out of pocket”.

The company offers small cash loans from £100 to £500 at annual percentage rates of 254.5 for a 50-week period or a massive 440.3 per cent for a 30-week period.

A £500 loan at the 50-week option would cost £884 to repay at around £17 a week – £384 in interest.

Criticism has come from a number of quarters and an Early Day Motion has been tabled in Parliament deploring the “unscrupulous money lending” of firms including Shopacheck.

The motion, signed by 68 MPs, called for the government to “outlaw excessive interest rates.”

A spokesman for the Consumer Credit Counselling Service said 440 per cent APR reached the point of “exploitation”.

He added: “If this company is specifically targeting people who are in very poor financial circumstances on benefits, that is very poor creditor behaviour.”

Canford Heath ward Cllr Sandra Moore said she was “horrified” by the loans.

“They are clearly targeting the most vulnerable and the most needy,” she added.

Greg Stevens, corporate affairs director for Cattles Plc, which owns Shopacheck, said the APR was so high because of the administration costs of their representatives’ weekly home visits to collect repayments. He said changes had been made in the home credit market following the results of a Competition Commission enquiry in 2006, and the introduction of the Consumer Credit Act 2006.

He said: “People are provided with pre-contract information before they sign anything. It is gone through with them so we can give them an explanation of what it is and how much it equates to in terms of total credit, including interest. “It is transparent.”