Mrs Sharratt could lose her house before Christmas

An MP has called for credit law to be tightened to prevent people who default on their repayments owing up to 30 times their initial loan.

Gordon Marsden said the example of two families in Blackpool, Lancashire, showed the system was unfair.

One couple, Fred and Jeanette Sharratt, now owe �72,000 on a �2,500 loan they took out 15 years ago.

They are being taken to court by the loan company, London North Securities, and risk losing their house before Christmas.

Since taking out the loan they have paid �10,000 back to their creditors.

But, after missing some payments, they were hit with high interest default penalties.

They are now being taken to court on 19 December.

Mrs Sharratt said: "They are wanting more and they keep adding all this money on and on and one and it's not going to go away.

I think that the way in which London North Securities and their solicitors Blatchfords have acted has not been flexible, sensitive or fair

Gordon Marsden, Blackpool South MP

"Even now they are adding �1,400 a month on this."

She added: "I'm not normally soft and I've always tried to make ends meet but what they're doing to us now... surely we can't be the only ones they're doing it to?"

Another Blackpool woman, Paulette Goldstone, tells a similar story.

She took out a �5,000 loan in 1992 and, despite paying back �15,000, owes over �30,000 after missing payments.

Blackpool South MP Mr Marsden (Lab) has now stepped in and is calling for a change in the law.

Paulette Goldstone owes �30,000 on a �5,000 loan

He wants the Office of Fair Trading to investigate if legal limits can be placed on default penalty interest.

Currently there is no limit to the amount credit companies can charge when penalising missed payments.

He said: "I think that the way in which London North Securities and their solicitors Blatchfords have acted has not been flexible, sensitive or fair.

"For these sums of money to be rolled up from the original debt is truly appalling."

Both London North Securities and Blatchfords Solicitors refused to comment, saying they would leave the arguments to the courts.