Log Book Loans Horror Stories

Apples2

I suppose I am more Blunt than Opinionated

RobertoMoir

Apples2 wrote: »

I suppose I am more Blunt than Opinionated

Heh. Got to hold my hands up there. I'm not exactly in a position to criticise others' manners at times!

Tirian

Apples2 wrote: »

I'm glad I bailed out responding to the ramblings of this wuckfit in #23.

Ho ho ho ... wuckfit ... hee hee hee, I see what you did there. Seriously though, thanks for taking the time to make it clear exactly how far you are prepared to "think through" these issues in reality.

One more for sp1987 - you might be interested to know that the Law Commission do not share your views on what the law is there to do, or on the fairness of the practices of logbook loan style companies. The Law Commission 2005 report on Company Security Interests looked specifically at the issue of Bills of Sale being used for consumer lending. I refer you in particular to paragraphs 1.46 to 1.53 (http://www.lawcom.gov.uk/docs/lc296.pdf)

Here's a few sample lines:

we asked consultees whether they agreed that the current law on the creation and registration of security interests by non-corporate debtors was complex, unworkable and in need of reform. The vast majority (over 90%) of consultees who responded agreed with our assessment

the extreme technicality of the registration requirements and the severe sanction if a mistake is made seem hard to justify.

Several new firms have entered this market, with consumer loans generally secured over cars. Such rapid growth strengthens the case for reforming this problematic area.

We consider that there is almost certainly a case for replacing the Bills of Sale Acts ... It should probably include the kind of protection provided by the Consumer Credit Act 1974 for those who obtain goods on hire-purchase and the like

I appreciate that you don't want "to be educated on the law" ... but if you are going swan around on forums like this and tell people how stupid they for not understanding what they've signed up for, then you should at least be aware that the law-makers don't necessarily agree with you.

And it's not just the borrower that is at risk either. Here's a last quote from the Law Commission report for you to mull over:

The penalties for failing to abide by these rules may be severe: under the 1882 Act a single technical defect may render the bill void between the parties. This means that the charge cannot be enforced even if the borrower is solvent.

Tirian

Well, well ... would you look at that:

Dickensian ‘logbook loans’ to be banned

sp1987

Tirian wrote: »

your ignorance about Darwinism quite possibly exceeds your ignorance about the law. I would question whether you even know what Darwinism is, given that sort of comment.

I would agree that my knowledge on Darwinism is significantly less than my knowledge of the law, having not studied a degree in the subject specifically, or indeed Biology in general. Then again, my ''ignorant'' personal study of The Origin of Species is quite sufficient for my needs.

Tirian wrote: »

I appreciate that you don't want "to be educated on the law" ... but if you are going swan around on forums like this and tell people how stupid they for not understanding what they've signed up for, then you should at least be aware that the law-makers don't necessarily agree with you.

You obviously misunderstand my stance, so I will repeat; ''If I wanted to be educated on ''the law'' I would study it at post graduate level not wait for vague references to unfair contract terms from some stranger on a forum written in an attempt to belittle something written quite obviously to deliver a certain result''. I say this because I already hold a law degree, but do not let that mere moot point stand in the way of your judgement on my ''swanning'' :rolleyes:.

I wonder if there is any room in your ''ad hoc reckon'' for other's opinions, seemingly not judging by your reactions to any criticism or reasoned argument.

Tirian

I note that despite your law degree, you have decided not to respond to any of the points that I made regarding the law on bills of sale, or the Law Commission's report on their use in consumer lending.

I am perfectly ready to respond to reasoned argument, just as soon as you are ready to provide any.

rog2

Apples2 wrote: »

The terms are clearly advertised.

What is Tirian's alternative if these companies are closed down??

In the murky world of 'Sub Prime Finance' 'The Terms' are rarely advertised - even rarer will they be 'clearly advertised'.
True, the 'terms' will be in the agreement that the 'debtor' signs - usually buried in the minutia of small print that a 'commission based' sales person will inevitably gloss over, or fail to mention, as such 'terms' may influence the debtor's decision as to whether he/she signs the agreement.

These 'companies' are reaping extortionate profits from often desperate people who, in reality, can not afford to pay such a price for a loan and these 'companies' know that.

They are little short of 'Loan Sharks'.

There are alternative sources of 'short term' finance, such as Credit Unions, who will NOT bleed a 'debtor' dry in order to finance their own luxurious lifestyles. The problem is that such alternative sources of sub prime finance do not have the same resources for advertising their 'services' and many ordinary people are unaware of their existence.

rog2

Tirian wrote: »

Well, well ... would you look at that:

Dickensian ‘logbook loans’ to be banned

And not before time. :T :T

There is an interesting article, linked to the above, on the whole topic of sub prime borrowing - Time to crush loan shark 'revival':

http://www.timesonline.co.uk/tol/money/consumer_affairs/article6389963.ece

It is certainly no coincidence that these 'companies' flourish when mainstream credit is restricted.

Gorgeous_George

I wonder how many people used 'logbook loans' and were happy with the facility. Removing this option whilst not replacing it with another (option) may not be such a good thing for all.

Perhaps not all borrowers want to be protected from themselves.

GG

rog2

Gorgeous_George wrote: »

I wonder how many people used 'logbook loans' and were happy with the facility. Removing this option whilst not replacing it with another (option) may not be such a good thing for all.

Perhaps not all borrowers want to be protected from themselves.

I'm not sure that it is a case of 'borrowerers not wanting to be protected from themselves', George.
These 'Bill of Sale Loans' were enshrined in Law over 130 years ago and, as such, can be entered into without being subject to all aspects of 'protection' (to both debtor and creditor) that is provided to normal 'consumer credit' loans by the Consumer Credit Act, 1974.
As such, they are almost specifically marketed to the sub prime debtors such as bankrupts and people with no 'credit rating', for whom mainstream credit facilities are, quite simply, not an option.
The Government is committed to looking at other options, including making it easier for this category of debtor to access Credit Unions and Social Funds, but this, in itself, will not be sufficient to replace the 'Bill of Sale Loan' market completely and it could, as you say, cause a potential 'gap' in the market.
Unfortunately, the less desirable elements of the Credit Industry will, I am sure, find another way in which to exploit this highly lucrative market.