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

Brains64

UsetheFORCE wrote: »

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.

They do and they don't really, they all have their own stringent criteria and this will vary from lender to lender, one lender will focus on one particular aspect of a borrowers credit record and others will pay more attention to something else, the result of this is that it can work for or against someone wishing to borrow from them.

Sometimes someone who could pay them back will still be rejected because they're application has failed within the particular measure that the particular lender in question is thorough about and yet someone else who is unlikely to be able to pay back could still get a loan from them because the lender is only looking at a particular part of their report that they base their judgment on.

The obvious problem really is that PDL companies like and need to be able to make quick decisions, it's what makes them convenient, competitive etc, they'd rather just say 'yes'...'no'...'next' rather than spending time giving a personal kind of service to each application and let's face it, nobody who applies for a loan really wants to be waiting for days, weeks etc whilst they do a thorough check for a decision, I know I don't, I just want to hear the magic words 'yes...application successful' not 'we'll write to you to let you know what our decision is' blah blah blah.

Fujiko

I am sorry if anyone is so desperate that their only recourse is to one of these lenders but I would have thought by now everyone was aware of just what they could be letting themselves in for. People who cannot borrow through more usual routes - bank, credit card - probably have a history of unsatisfactory loans and taking out yet more will not solve their problem long-term. IF YOU CAN'T AFFORD IT TODAY YOU CERTAINLY WON'T BE ABLE TO TOMORROW.

ACG

The interest rates arnt Sky high, the APR is sky high.

Its unfair to work out apr on a loan that you take out for 30 days to one that you take out over 5-10 years.

The reality is (according to the wonga website) £100 would cost around £15 for 10 days - which is actually 15% interest... not 1500%

If my mate lent me £100 i would probably give them £10 for doing me a favour or at the very least get them a couple of pints down the local which is a good £6. Taking into account this is a business with overheads and theyre there to make a profit what theyre charging isnt actually that bad.

I dont sell payday loans and have never had to use one thankfully but i dont see the problem. I think someone (Stella) is trying to raise her stock for whatever reason by picking on an industry with a less than great reputation.

UsetheFORCE

ACG wrote: »

The interest rates arnt Sky high, the APR is sky high.

Its unfair to work out apr on a loan that you take out for 30 days to one that you take out over 5-10 years.

The reality is (according to the wonga website) £100 would cost around £15 for 10 days - which is actually 15% interest... not 1500%

If my mate lent me £100 i would probably give them £10 for doing me a favour or at the very least get them a couple of pints down the local which is a good £6. Taking into account this is a business with overheads and theyre there to make a profit what theyre charging isnt actually that bad.

I dont sell payday loans and have never had to use one thankfully but i dont see the problem. I think someone (Stella) is trying to raise her stock for whatever reason by picking on an industry with a less than great reputation.

Alas, that was a point I made, within the term of the loan. If for some reason it isn't paid on the due date, after that only a fair interest rate should be charged.

Of course the service charge becomes a ridiculous interest rate when the lender wants to charge it for multiples of the original loan term. How many people have been taken to court by a PDL and been forced to pay these high levels of interest beyond the loan term?

This conversation can go on and on...

nyc_451

ACG wrote: »

I think someone (Stella) is trying to raise her stock for whatever reason by picking on an industry with a less than great reputation.

I think so...although I didn't read the article - just too tired of all this fuss about pay day loans

I see people coming for a loan when they already have a few pay day loans, and they are aware that the amount to pay back is bigger then their salary, yet I give you 99% - try to advise them not to borrow more than they can afford and they will not listen to you. Then there are people who don't have enough proof of income or enough income itself to qualify for a loan, and they make huge complaints to managers or even higher until they get 'their' money. Other ones already come with a negative attitude because of TV/press; it seems to me that they are blaming us for 'making' them borrow, blaming us for high APR, blaming us for not helping them when payment is due and they don't have money even for roll over although they haven't lost their job, and when the company tries to take money back they go online and post horror stories. And it's so hard for me to believe them knowing the other side.

I know this kind of business is not moral but it doesn't affect me that much anymore because some of our customers are more ridiculous than our high APR.

colin_tomlinson

ILW wrote: »

Guess it will be good news for the illegal legbreakers.

Are there really people out there that do not realise that Payday loans are very expensive if carried beyond the term?

There are people out there who don't understand APR or what the figure means. Many assume an APR over 100% is including the principle.

Further, there are those with pay TV (slot timer) who think when the official comes to empty the coin box and takes the monthly payment, that the money they are given back is free money - and that they can watch TV free for a week.

I'm not making this up. I could even provide names, but won't.

~Brock~

ACG wrote: »

I dont sell payday loans and have never had to use one thankfully but i dont see the problem. I think someone (Stella) is trying to raise her stock for whatever reason by picking on an industry with a less than great reputation.

You can't just blame good old Stella...she is just the mouthpiece of a significant move to express moral outrage at what in any other industry would be a simple supply/demand led and priced free market.

The real concern should be channelled towards such political agendas, and the constant 'nanny knows best' attitude where otherwise perfectly functioning adults are not given the respect of being expected to abide by their own decisions when getting into such agreements.

I am no fan of payday loans, and by all means ensure they are properly regulated, but at the same time I am sick of hearing of people squeaking about how they shouldn't have been lent the money in the first place because they were - apparently - vulnerable. !!!!!! does vulnerable mean other than an PC word for 'thick'?

Perhaps future credit scores should include an IQ factor, which measures a person's ability to step outside their front door and commerce without both parents present. Now there's an idea! :cool: