MSE News: Stella Creasy: Action needed NOW on payday lenders

in Loans
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  • pvtpvt Forumite
    1.4K Posts
    Treadmill wrote: »
    All this talk of 'contracts' like they are the holy grail is silly. Just because something is written in a contract that doesn't automatically make it fair or legal,

    So what are you suggesting as an alternative to contracts with terms and conditions that lay down both party's obligations? A gentleman's handshake perhaps?
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  • pvtpvt Forumite
    1.4K Posts
    Rafter wrote: »
    Callum,
    to those customers to whom they would historically have offered a unauthorised overdraft,

    Banks don't "offer" unauthorised overdrafts! Otherwise, by definition, they would surely be authorised ones wouldn't they???
    Optimists see a glass half full :)
    Pessimists see a glass half empty :(
    Engineers just see a glass twice the size it needed to be :D
  • TreadmillTreadmill Forumite
    1.1K Posts
    pvt wrote: »
    So what are you suggesting as an alternative to contracts with terms and conditions that lay down both party's obligations? A gentleman's handshake perhaps?

    Not at all I am just pointing out that because something is in a contract it does not necessarily make it as legal or unchallengeable as people would believe here, it's as meaningless as saying 'governed by legislation' Burglars are governed by legislation but they will still burgle your house.
  • TreadmillTreadmill Forumite
    1.1K Posts
    pvt wrote: »
    Banks don't "offer" unauthorised overdrafts! Otherwise, by definition, they would surely be authorised ones wouldn't they???

    First Direct prefer to call it an 'informal' overdraft and charge you £25 for taking advantage of the 'facility' lol
  • Treadmill wrote: »
    Not at all I am just pointing out that because something is in a contract it does not necessarily make it as legal or unchallengeable as people would believe here, it's as meaningless as saying 'governed by legislation' Burglars are governed by legislation but they will still burgle your house.

    Burglaries are not generally done on terms agreed jointly with the burglar and householder in advance. (Except insurance fraud)
  • chanz4chanz4 Forumite
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    Part of the Furniture 10,000 Posts Name Dropper Xmas Saver!
    Forumite
    pdls are not half the time, most agree then refuse to pay
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
  • pvtpvt Forumite
    1.4K Posts
    You make a business decision to lend to someone, if it turns sour then tough!!! You shouldn't be allowed to attempt to extract ridiculous sums off people, only the principal. charge, reasonable costs to recover and a little interest.

    Even if the business decision is based on a pack of lies and deception by the borrower?

    I guess I'm just wondering where the suggested denial of recourse to common law is heading here....
    Optimists see a glass half full :)
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  • edited 2 January 2013 at 11:41PM
    UsetheFORCEUsetheFORCE Forumite
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    edited 2 January 2013 at 11:41PM
    pvt wrote: »
    Even if the business decision is based on a pack of lies and deception by the borrower?

    I guess I'm just wondering where the suggested denial of recourse to common law is heading here....

    i.e. A fraudulent application??? Well if it is clearly fraud then action should be taken against the borrower for committing it!

    There are ways of checking applications and suitability for a loan although I would guess a lot of PDL's don't do any thorough check on their potential clients.
    I have numerous qualifications in Business and Finance, Accountancy, Health and Safety and am now studying Law.

    Don't rely on anything I write as it may be wrong!!!
  • pvtpvt Forumite
    1.4K Posts
    i.e. A fraudulent application??? Well if it is clearly fraud then action should be taken against the borrower for committing it!

    There are ways of checking applications and suitability for a loan although I would guess a lot of PDL's don't do any thorough check on their potential clients.

    The point I'm making is that people clearly do lie about their income, job security, and ability to repay these PDLs, which yes, is a fraudulent application. Compare that with Car Insurance Cos, are they vilified when they find out someone hasn't declared a previous claim or accident and increase the previously agreed premium? It's pretty much the same thing; it's about assessing risk.

    But what I am so indignant about here is the idea that if a borrower does turn out to have lied, then that's tough, the PDL Co should just go swivel and not have recourse to common contract law.

    Compare that with a train operator being defrauded by a passenger claiming to be younger than they are. There are more thorough checks that the TOC could conduct to establish a client's age, even though the effort is totally out of proportion to the fare involved. So are we saying they should get the same treatment? If, in this situation, a passenger is caught defrauding them then the TOC should not be able to recover the additional fare because they could have done more vigorous tests when the ticket was sold?

    I'm not a fan of PDLs, and agree further regulation and control is required. But can't help feeling there's some very strange and worrying principles being advocated in some of these posts.
    Optimists see a glass half full :)
    Pessimists see a glass half empty :(
    Engineers just see a glass twice the size it needed to be :D
  • pvt wrote: »
    The point I'm making is that people clearly do lie about their income, job security, and ability to repay these PDLs, which yes, is a fraudulent application. Compare that with Car Insurance Cos, are they vilified when they find out someone hasn't declared a previous claim or accident and increase the previously agreed premium? It's pretty much the same thing; it's about assessing risk.

    But what I am so indignant about here is the idea that if a borrower does turn out to have lied, then that's tough, the PDL Co should just go swivel and not have recourse to common contract law.

    Compare that with a train operator being defrauded by a passenger claiming to be younger than they are. There are more thorough checks that the TOC could conduct to establish a client's age, even though the effort is totally out of proportion to the fare involved. So are we saying they should get the same treatment? If, in this situation, a passenger is caught defrauding them then the TOC should not be able to recover the additional fare because they could have done more vigorous tests when the ticket was sold?

    I'm not a fan of PDLs, and agree further regulation and control is required. But can't help feeling there's some very strange and worrying principles being advocated in some of these posts.

    I've never advocated those making fraudulent applications getting away with it, if it clearly fraudulent then action should be taken against them. I think a lot of PDL's can't be that stringent in checking applications if they have a major issue with fraudulent applications.

    All PDL's should check the potential borrowers Credit File, they should report the history to the Credit Reference Agencies. There are other things they can do which won't take up much time or cost too much.

    Doing a credit file check/reporting to credit reference agencies would tell any potential PDL that a client already has a short term loan(s) and so I would believe has a cashflow issue, lending to them is likely to make the situation worse.

    Anyway, this does seem an emotive subject...
    I have numerous qualifications in Business and Finance, Accountancy, Health and Safety and am now studying Law.

    Don't rely on anything I write as it may be wrong!!!
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