US actor Alec Baldwin has been criticized by Australia’s leading consumer advocate for agreeing to flog credit cards and high-interest loans for controversial new lender, Latitude Financial Services.
Latitude is the new business name for an expensive line of loans and credit cards that were previously marketed by GE Capital.
Last year, GE sold its Australian financial services business to a consortium of private investors, which now uses Mr. Baldwin to attract customers to the Latitude brand.
When not making Latitude products, the film and television veteran attracts both praise and contempt for his biting impersonations of Donald Trump on a comedy show. Saturday Night Live.
There is a touch of irony in the actor’s decision to lend the company his name, as several of Latitude’s owners have ties to the Republican Party or Mr. Trump’s business empire.
Mr. Baldwin is a registered Democrat, social justice activist and outspoken critic of Mr. Trump.
While television commercials feature Mr. Baldwin promising that borrowers “can do better with Latitude,” the famous actor avoids mentioning the exorbitant rates and fees on the company’s credit products.
For example, Latitude will charge interest of up to 29.99% on an unsecured personal loan of $ 4,000 and will also charge a monthly service fee of $ 13.
There is also a set-up fee of $ 140, which means the total cost of interest and annual fees on a small loan can exceed 37% of the principal.
In addition, Latitude offers one of the most expensive credit cards on the market – the Visa GEM card.
In 2015, CHOICE ranked the GEM Visa product as one of Australia’s most expensive credit cards when it carried an annual interest rate of 22.99%.
Latitude now markets the same card at 24.99%, making it the most expensive Visa card in the country, according to financial comparison site Mozo’s online database.
CHOICE: “Stay away from them”
Erin Turner, policy and campaign manager at CHOICE, warned that the exorbitantly priced loans marketed by Latitude could seriously erode the financial situation of low-income borrowers.
“It looks like this company is marketing extremely poor products with the approval of a celebrity,” she said. The new daily.
“I wouldn’t go anywhere near them.
“These are low value loans and credit cards that can cause financial damage to people. “
Ms Turner said the ads were designed to draw viewers’ attention to a celebrity, rather than the price.
“It always pays to look beyond marketing – consumers should pay more attention to the numbers,” she said.
“Never make a decision on what a celebrity recommends, the price is more important.”
Latitude owners linked to Trump
Mr. Baldwin’s involvement in Latitude is a paradox.
While the actor has been a fierce critic of the US president-elect, two of Latitude’s top investors – Deutsche Bank and private equity firm Kohlberg Kravis Roberts (KKR) – have gambled a little on Mr. Trump’s performance.
Deutsche Bank is Mr. Trump’s largest bank lender, having loaned his property development companies more than $ 360 million (A $ 480 million).
This has raised concerns in the United States that Mr. Trump faces a fairly significant conflict of interest in handling political decisions that may impact Deutsche when he takes office.
Mr Trump has refused to liquidate his equity investments in his companies, raising concerns among government ethicists that his presidency is plagued by deep conflicts of interest.
KKR also has ties to Trump
Henry Kravis, founder and chairman of KKR, is a long-time donor to the Republican Party and reportedly declined Mr. Trump’s invitation to become Treasury secretary in the new administration.
However, KKR and a handful of other large private equity groups are expected to be the big beneficiaries of Mr. Trump’s plan to cut corporate taxes in the United States.
According to an analysis of Mr. Trump’s tax policy in Forbes magazine, the value of private equity firms such as KKR is likely to double after the measures are implemented.