Pay day loans should be banned !!!

talana

Apples2 wrote: »

Fire should be banned !!
It causes untold misery when you put your fingers in a flame, it should be outlawed.
Surely they can't expect us to use a naked flame responsibly!!!

Agreed.
Some people can't use payday loans responsibly, that's completely evident. But that's no reason to ban them, the problem lies with the individual.

Another example...cars.
A sizeable minority are apparently incapable of driving a car responsibly and sensibly. They're a danger to themselves, and even worse, to other people. So is the solution to ban cars?

ciscokid

But still...can anyone enlighten me as to this....its the height of an economic crisis (so they say)

WHERE DID THE MONEY COME FROM TO BACK ALL THE PAY DAY LOAN COMPANIES?!?!?!

whatyadoinsucka

judging by the ones i've seen and the clientale frequenting or working in such places


some are fronts for money laundering pure and simple, others are backed up by banks/brokers/insurance companies, although looking at companies house you'd have to dig deep to get past the shell, holding companies and subsidiaries to get back to the banks

ciscokid

talana wrote: »

Another example...cars.
A sizeable minority are apparently incapable of driving a car responsibly and sensibly. They're a danger to themselves, and even worse, to other people. So is the solution to ban cars?

This is why we must pass a test in order to have a license, to demonstrate we know what we are doing. In my opinion, this test should require renewal every so often (I know after losing my license I had so many bad habits that made passing a second time quite a challenge and certainly made me rethink my whole attitude to driving).

In finance however, there is one test, and its called a credit test.

I passed a credit test once when I had no job.

I now earn a fortune in compared to how much I earned when I could pass a credit test (meaning I have the ability to repay a loan) but can not pass the test.

This to me seems the equivilent of passing my driving test with 100% accuracy yet being told I have failed because I wore the wrong colour of socks.

pink_princess

The_Filipina_cleaner wrote: »

It is free market.

I doubt that these "payday" loan companies are making exorbitant profits. If they were, they would soon be undercut by another competitor. Organising relatively small loans for a very short period of time costs a lot in admin. Secondly, given that most of their clients would probably get a bank overdarft instead (if they could), then they are probably very poor credit risks and a significant number of them default.

At least the firms tell you exactly how much they are going to charge and for how long. It is is a matter of choice whether you take it.

You couldn t be more wrong, the overheads are low ,the profit margin is very good and the default is 20 % across the industry.Thats why so many of these companies are springing up .Take check n go as an example.It just keeps opening more and more stores across the world doing pay day loans.We must tackle the reasons people use them as they are here to stay .

opinions4u

ciscokid wrote: »

But still...can anyone enlighten me as to this....its the height of an economic crisis (so they say)

WHERE DID THE MONEY COME FROM TO BACK ALL THE PAY DAY LOAN COMPANIES?!?!?!

Private equity capital.

Those I've spent a few moments looking in to are limited companies set up towards the back end of 2007 or later.

Most likely a few people saw the problems in America and threw their money in the kitty to capitalise an enterprise at the bottom end of the market that capitalises on the Credit Crunch - if the supply of cheap credit has dried up, which it has, fill part of that gap with a supply of expensive credit. Combine it with a quick service and identify a niche (e.g. it's cheaper than paying bank charges) and you're away.

The amount of money available is relatively small in the greater scheme of things, but the profitability is fairly significant and this can help to drive future growth.

I think there's a place for these companies. It's a better option than turning to illegal loan sharks and if they're used as intended (e.g. paid back on payday) there isn't a problem.

It's just too many people don't use them that way - and then the problems begin.

ciscokid

All just seems too much of a coincidence to me!!!

diable

They should also ban cheap credit and go back to the days off HP were you needed a 40% deposit before being able to buy anything, that'll slow down the turnover in the shops like Curry's and Comets..........

iolanthe07

diable wrote: »

They should also ban cheap credit and go back to the days off HP were you needed a 40% deposit before being able to buy anything, that'll slow down the turnover in the shops like Curry's and Comets..........

When I bought a car on credit back in the 70's I had to put a third down and pay the rest back over 24 months. This was common and a good idea because it prevented people from taking on too much debt. If this regime was re-introduced we wouldn't see all the sad posts here and on the debtfeewanabee and bankcruptcy boards.

barbarawright

diable wrote: »

They should also ban cheap credit and go back to the days off HP were you needed a 40% deposit before being able to buy anything, that'll slow down the turnover in the shops like Curry's and Comets..........

Or, and this is quite true, HP companies would hire private detectives to assess whether clients would be able to keep up the payments on a new fridge.