Time for a new campaign? Short term loans scandalous

Klinsmann

Now the bank charges campaign has succeeded, can Martin take a new one on?

Short term loan compainies are a disgrace. I was horrified a couple of years back when Wonga charged about 2600% interest on a one month loan. They're over 4000% now even though central interest rates remain tiny. Today I saw Pounds2day offer loans at 5569.40% - get £100 for 6 months, pay back monthly and final cost £260. All this on TV and during daytime slots and around the time children would be watching TV.

Have the FSA/Bank of England (whoever) no ethics or teeth to stop this? Have the company owners/shareholders no shame? This is super-exploiting the neediest and most desperate in society. It makes store cards and credit cards look generous with their 20, 30, 40% plus interest. That these companies exist at all makes the UK a worse place to live.

Can their be a campaign against these companies and in favour of proper regulation?

ILW

Would you prefer that the customers who use these services are driven into the arms of the "legbreakers"?

Apples2

Wednesday is upon us.

Malky

While I'm not defending these companies, what it comes down to is they're providing a service. People choose whether to use them or not and pay the penalties when they do. In most cases, these companies make it clear that these are short term loans ie one month. If someone can't afford to pay the loan back then a) they shouldn't have borrowed in the first place or b) they pay the charges and interest for failing to pay. Yes, the APR is high but that is based on interest for a whole year. No one should be paying for a year but unfortunately some do through circumstance etc.

_Andy_

Not this old chestnut.

Klinsmann

ILW wrote: »

Would you prefer that the customers who use these services are driven into the arms of the "legbreakers"?

Two wrongs do not make a right. Surely it is possible to attempt to attempt to stop/reduce "legbreakers" and also the legalised companies who may be one step better than them in their penalties but aren't perhaps far off in the chanrges they make?

Apples2

My reply #6 in this post gives my take on it

https://forums.moneysavingexpert.com/discussion/comment/44093170#Comment_44093170

Klinsmann

_Andy_ wrote: »

Not this old chestnut.

Apathy allows evil to flourish, old chestnut or not.

I'll say no more, I have better things to do with my time. But while I wasn't really expecting everyone to go "Hey, great idea, how original" people taking time to dismiss it like that is a waste of all our time too. Sniff and ta ta.

ILW

Klinsmann wrote: »

Two wrongs do not make a right. Surely it is possible to attempt to attempt to stop/reduce "legbreakers" and also the legalised companies who may be one step better than them in their penalties but aren't perhaps far off in the chanrges they make?

These companies only tend lend to those that cannot get money from mainstream finance companies. The default rate is very high, hence the high rates and charges. You could ban them or cap rates, but where do you think the high risk borrowers would go?

[Deleted User]

Klinsmann wrote: »

N All this on TV and during daytime slots and around the time children would be watching TV.

It's horrific. My six year old has now consolidated all her borrowing into one easy to manage repayment, but she has had to give the keys to her piggy bank to Wonga.

Apples2

Klinsmann wrote: »

Apathy allows evil to flourish, old chestnut or not.

I'll say no more, I have better things to do with my time. But while I wasn't really expecting everyone to go "Hey, great idea, how original" people taking time to dismiss it like that is a waste of all our time too. Sniff and ta ta.

That just sounds infantile. Most on here will happily enter a debate about it.

You need to come up with a solution, not just dismiss the current product.

What APR would you like to see on a short term loan?
How much would they earn over the 25 days of the loan term?
Could you make a viable business from that figure??

There will ALWAYS be a requirement for short term fixes for those without disposable income?
Do you simply remove the facility and prevent them from ever obtaining a loan akin to sticking two fingers up at them with an "I'm alright Jack" attitude?
If not, what do you propose?

If you are suggesting some Government backed, low interest rate loan for all. We'd all be getting our loans from them and not the banks so the system would collapse.
what happens when they fail to repay? The rest of the taxpayers cover it and be happy?
Or are you suggesting the poorest of the poor get the best rates and the richest of the rich get royally humped over?