Movement Against PayDay Loan Companies

michael1983l

Wow I guess I didn't guage the general concensus well at all. I thought with the massive influx in people coming on here complaining about these companies and the grip they had on them that I would get a little more support. I'm all for freedom of choice but these companies simply prey on the vulnarable. So far I have 2 signatures with mine being one of them

confused76

michael i don't like them either. i'm surprised so few people have said the same, but everyone is entitled to their view.
my view is that an APR of that size is just plain immoral
i realise that some people think that people who currently use payday loans etc might turn to loan sharks if payday loans are removed, and i agree this is a problem. however, i think that the issue of loan sharks should also be tackled, or some other solution found.
i know people won't agree but that's just my point of view

ILW

confused76 wrote: »

michael i don't like them either. i'm surprised so few people have said the same, but everyone is entitled to their view.
my view is that an APR of that size is just plain immoral
i realise that some people think that people who currently use payday loans etc might turn to loan sharks if payday loans are removed, and i agree this is a problem. however, i think that the issue of loan sharks should also be tackled, or some other solution found.
i know people won't agree but that's just my point of view

APR on a short term loan means nothing, why do so many have trouble understanding this?

CLAPTON

michael1983l wrote: »

Wow I guess I didn't guage the general concensus well at all. I thought with the massive influx in people coming on here complaining about these companies and the grip they had on them that I would get a little more support. I'm all for freedom of choice but these companies simply prey on the vulnarable. So far I have 2 signatures with mine being one of them

I'm sure many agree with you in principle it's the practicalities that are difficult.

The government have introduced a stream of well intentioned laws but sadly many have unintended consequences... not wanting to be political here but no-one is against better child protection but is stopping dads and mums take photos on sports day really necessary, anti terrorist laws now stop tourists taking a photo of the gerkin or a policeman, health and safety stop kids doing anything adventurous, human rights give the criminal rights that many think in appropriate etc etc.

So one needs some pretty well worked out proposal before many could support it even if we support the principle.

~Brock~

CLAPTON wrote: »

I'm sure many agree with you in principle it's the practicalities that are difficult.

The government have introduced a stream of well intentioned laws but sadly many have unintended consequences... not wanting to be political here but no-one is against better child protection but is stopping dads and mums take photos on sports day really necessary, anti terrorist laws now stop tourists taking a photo of the gerkin or a policeman, health and safety stop kids doing anything adventurous, human rights give the criminal rights that many think in appropriate etc etc.

So one needs some pretty well worked out proposal before many could support it even if we support the principle.

:T

Thank God there is still some common sense out there.

~Brock~

confused76 wrote: »

my view is that an APR of that size is just plain immoral

I dont know if anyone else saw the 'Dispatches' program on Channel 4 a few weeks ago - the one with the unemployed woman who had all mod cons in her flat courtesy of Brighthouse (although she was portrayed as a victim in a bizarre sort of way - she looked anything but sat on her comfy Brighthouse sofa).

I have never seen such a poorly researched and badly presented consumer affairs program in my life.

When talking about Payday loan companies, the camera gradually zoomed in on a loan advert, and focussed on the APR of 2400% - if you were quick enough you would have seen the rest of the example to which this APR related, which was a loan of £50 and a total interest charge of £14. Yes, that's right £14. The APR was so high because it was payable within a month, but the actual interest AMOUNT on this loan was £14 !!

Now can I ask those of you who have no experience of this to imagine you were running a commercial lending business.

Before you make a profit you have got to pay for premises, staff, light, heat, IT, cars, travel, rates, licensing, bank/funding charges, paperwork, regulation, bad debts etc etc etc. There will be fixed costs associated with the setting up of this £50 loan that are the same as if the loan was £5000. How much of that £14 interest would be left as profit?

To those of you who are bleating about the APR, may I ask you one simple question - taking the above into account what do YOU think should be a fair price for this service? Would it be more or less than £14?

By the way, I am NOT a Payday lender before anyone asks, but I get annoyed with the one sided arguments being put forward by those who do not understand what they are talking about....ESPECIALLY lazy journalists!!

sp1987

~Brock~ wrote: »

I dont know if anyone else saw the 'Dispatches' program on Channel 4 a few weeks ago - the one with the unemployed woman who had all mod cons in her flat courtesy of Brighthouse (although she was portrayed as a victim in a bizarre sort of way - she looked anything but sat on her comfy Brighthouse sofa).

I have never seen such a poorly researched and badly presented consumer affairs program in my life.

When talking about Payday loan companies, the camera gradually zoomed in on a loan advert, and focussed on the APR of 2400% - if you were quick enough you would have seen the rest of the example to which this APR related, which was a loan of £50 and a total interest charge of £14. Yes, that's right £14. The APR was so high because it was payable within a month, but the actual interest AMOUNT on this loan was £14 !!

Now can I ask those of you who have no experience of this to imagine you were running a commercial lending business.

Before you make a profit you have got to pay for premises, staff, light, heat, IT, cars, travel, rates, licensing, bank/funding charges, paperwork, regulation, bad debts etc etc etc. There will be fixed costs associated with the setting up of this £50 loan that are the same as if the loan was £5000. How much of that £14 interest would be left as profit?

To those of you who are bleating about the APR, may I ask you one simple question - taking the above into account what do YOU think should be a fair price for this service? Would it be more or less than £14?

By the way, I am NOT a Payday lender before anyone asks, but I get annoyed with the one sided arguments being put forward by those who do not understand what they are talking about....ESPECIALLY lazy journalists!!

I too saw the programme.

I completely agree re: the interest. This loan is sold as e.g. £50 with £14 interest paid back on payday. All one has to ascertain is whether they are sure they will have £64 available on the pay back date. If not, leave well alone.

It is the same reason for me not to get car finance. I know I have funds to pay x amount (say £150) in car finance to purchase a new car this month, however such agreements last for e.g. 5 years and I personally cannot comment on how well financially I will be doing in the next 2 months let alone the next 59 months, anything can happen! Many people are not cautious enough about their borrowing and that is not exclusive to those on lower incomes.

I think impartial education/advice should be a pre-requisite of getting any financial product and thus ''irresponsible'' lending would not exist as a throwabout term, it would be exclusively ''irresponsible borrowing''.

RobertoMoir

MarkyMarkD wrote: »

Being stupid is not a reason to be prevented from lending, under most people's interpretation of reasonableness. Not understanding the (fairly clear) terms of most payday loans is also not a reason for the facility to be unavailable for those who DO understand them.

I really wish people were refused loans if they were too... uh.. under-educated to understand them, to be honest. I think it would save a lot of heartache later on for people who fall victim to their own naivety.

In any case, I agree that complaining to the FOS is hardly likely to help anything. This is more of a "write your MP" job for those who feel strongly about it one way or another.

RobertoMoir

michael1983l wrote: »

Wow I guess I didn't guage the general concensus well at all. I thought with the massive influx in people coming on here complaining about these companies and the grip they had on them that I would get a little more support. I'm all for freedom of choice but these companies simply prey on the vulnarable. So far I have 2 signatures with mine being one of them

So would you prefer these vulnerable people went to "Bermondsey Dave's legbreaker loans", with an APR of "we dislocate your ankle as a down-payment on the full leg-break if you don't pay up?" instead?

I'm quite prepared to accept that Payday loan companies are bad. But what if the alternatives are even worse?

cos_2

Being short of money is terribly common, and I've been there many times during my life. It is scary and very worrying when you don't know how you're going to pay the rent or buy food for yourself or family.

I've used payday-type loans in the past, and also the good old Provie. They both helped me out when times were running month to month.

Sorry, OP, but I think they provide a very useful quick financial fill, and can't support your petition.