Provident Financial faces backlash from Barnardo’s as doorstep lending profits rise

halight

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6731180.ece

Provident Financial, the doorstep lender that offers cash-strapped households emergency loans, drew criticism from charities yesterday as it reported a 3.5 per cent rise in profits.

Companys like this i belive should be closed down. Some of the IRs that thay charge are just unbelivable. Why would anyone use them, when there are now credit unions?

iolanthe07

Companies like this I believe should be closed down.

Providential is at least up front with its interest rate. Closing them down would force desperate people into the arms of loan sharks. Credit Unions are great, but you usually have to save with them for a while before you can get a loan, and some people's lives are so chaotic that they live day to day without putting anything by for the future.

halight

iolanthe07 wrote: »

Companies like this I believe should be closed down.

Providential is at least up front with its interest rate. Closing them down would force desperate people into the arms of loan sharks. Credit Unions are great, but you usually have to save with them for a while before you can get a loan, and some people's lives are so chaotic that they live day to day without putting anything by for the future.

Yes i understand what you are saying about the credit unions and saving.

But i wonder if the peopel who use providentil also use loan sharks? when thay have borrowd all thay can from there door step leander and missed loads of payments thay still have to turn to someone and thats normaly the loan shark. I wonder how many people have gone to the loan shark to borrow maony to pay there door step lender?

Conrad

Why don't Barnardos set up an alternative lender then?

What the great Brit public don't factor in here is that Provident employ people to collect the payments. Those people, unlike a direct debit need an income, an office, benefits, health and safety, insurance, legal teams, HR, sick pay, paternity, a car etc.

halight

The problem is that most of the people that tahy lend too dont understand IRs i.e. how much thay wil end up paying back.
Thay dont understand that if thay miss a payment then thay get charged and this is added to how much thay owe and that thay will end up paying intrest on this too. Also missing a payment means that it will take longer to pay off the loan which in turn will cost them more.