Pay day loan companies

nickboylan

Hi all,

I have a quick question about the legality of these pay day loan companies.

How are they able to complete the loan process and send cash to my account without a physical signature?

If someone has the correct details a loan can be easily take a loan out in anyone's name.

How is this possible and how are these companies allowed to be able to operate in such a way?

I've heard horror stories of people being financially crippled by these companies and they have destroyed people's lives with irresponsible lending. Some companies charge 2000% APR.

rdwarr

For every irresponsible lender there is an equally irresponsible borrower.

Put it this way. I have a car worth £500. If you know that, and buy it off me for £3000, which one of us is being irresponsible?

[Deleted User]

nickboylan wrote: »

Some companies charge 2000% APR.

Not many, I would have thought. That's too low a figure to make a profit on small value, short term loans with such a risky base. 4000% and upwards tends to be the norm.

nickboylan

But how are they lending without getting a physical signature?

They seem to be able to complete the whole loan progress over the internet.

[Deleted User]

Just about all lenders can do this, through e-signatures. The combination of name, address and bank details confirm the applicant. There's no point in applying in someone else's name if the money is going to be paid into their account.

nickboylan

hmmm,

what happened to the good old days of a face to face meeting, signature and a handshake?

These companies are the reason why this country is in such a terrible state.

I know its irresponsible borrowers but if someone is desperate and a company dangles some money in front of them they would probably take it.

It is far too easy for people to get loans and I really think this terrible loan shark type lending should be stopped or some strict laws put in place.

[Deleted User]

nickboylan wrote: »

what happened to the good old days of a face to face meeting, signature and a handshake?

We all started demanding everything for the lowest possible price. So such luxuries were dispensed with. And no one appears to be willing to pay to put it back, as ulitmately these costs are borne by the customer.

I would disagree that these companes are the reason for the recession. It's split between lenders being too optimistic about their customer base and customers being too greedy, and no one planning for the long term.

nickboylan

I agree, customers are greedy and banks and loan companies are feeding the greed.

I also agree the payday loan companies are the not sole reason for the recession. But the entire concept is ridiculous. Like my mum always said 'If you can't afford it, you can't have it'

I just disagree with how easy it is to get the cash

DCFC79

People just need to have some self control and see the big picture eg how would they pay the oan back the following month.

Mfox2012

Their selling point is the fast payout, menaing needing cash in a hurry. I got my credit card this way with a large company online signature then card arrived. RBS also do an esignature for personal loan online to save paperwork. Going forward this is the way companies will go.

When the payday loan companies credit search you they validate your bank details so they can be confident the money is going to the right person. On occassion its fails just like any company. I dont think these companines are the problem its the person, if you cannot afford it you shouldnt take it out. To be fair they make it super clear how much you pay back and the date.

pheonixrising21

nickboylan wrote: »

Hi all,

I have a quick question about the legality of these pay day loan companies.

How are they able to complete the loan process and send cash to my account without a physical signature?

If someone has the correct details a loan can be easily take a loan out in anyone's name.

How is this possible and how are these companies allowed to be able to operate in such a way?

I've heard horror stories of people being financially crippled by these companies and they have destroyed people's lives with irresponsible lending. Some companies charge 2000% APR.

Sorry, but how is the addition of a physical signature going to help? If I had the rest of the details needed, why could I not just sign any old signature? Its not like there is a central record of everyones signature is there?

Also, as someone else pointed out, the bank account confirms the ID, so if I wanted to take out a loan in your name, the cash would go to you and not me. I would see no benefit and you would just send the money back informing the PDL what has happened, whilst reporting the ID theft the appropriate authorities.

Also, PDL's are often required quickly (they are, afterall, meant to be short term). If you get to a week from payday and a sudden emergency comes up that you can't cover and decide that a PDL is the best way out, then if you sign up online you can get the funds immediately. if it required a signature, a form would need to be sent out, signed by you (for what good it would do) and then posted back. That's what? 4 days? In the meantime, your bank account goes overdrawn and you get an OD charge which is twice what the PDL would have charged you, plus the PDL is in motion , so you get that charge too as the money is lent to you and you have to pay it back!

Also, many other more mainstream lenders have totally online application processes. Certainly, my CapOne CC did and I think my AA card (MBNA) did as well.