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MSE News: Payday lenders shut up shop after OFT probe

in Loans
12 replies 2.3K views
"Almost half of the payday lenders ordered by the OFT to prove their practices are up to scratch are leaving the market..."
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Payday lenders shut up shop after OFT probe

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  • chanz4chanz4 Forumite
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    oops I wonder where those desperate will go now, oh yeah provident
    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.
  • CRISPIANNE3CRISPIANNE3 Forumite
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    Myself I see nothing wrong in borrowing from pay day loan organisations.
    Provided the borrower acts sensibly they can be a life saver when you need cash in a hurry.

    Not so long ago if the borrower could not get funds from their bank the alternative was the loan shark.

    Fortunately I have no need to borrow money but if I did I know who I would prefer.
  • jaxdiajaxdia Forumite
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    I think you're forgetting that only the payday lenders who felt they couldn't prove their practices were above board have shut up shop. This is good for us. You can't tell me loan sharks are a good thing.
    Wins of 2014: *zip*
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  • MobileSaverMobileSaver Forumite
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    jaxdia wrote: »
    This is good for us.

    Is less competition a good thing?

    The remaining payday lenders must be over the moon that almost half their competitors have pulled out of the market.

    Every generation blames the one before...

    Mike + The Mechanics - The Living Years
  • ReaperReaper Forumite
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    1) Set up a dodgy payday loan company which breaches all the rules.
    2) Run it for years until a snail like investigation finally takes place.
    3) Shut up shop with no penalties and laugh all the way to the bank.
  • So 1 in 3 lenders has quit, but the 3 lenders that have 70% of the market are still going?

    Amazing what you can do with statistics innit? A bit like Premium Bonds.

    Of course, the lenders who are quitting are not doing so because they are stuggling to make any money in this market dominated by the big 3 payday lenders, leaving the other 47 lenders to fight over just 30% of the market? But there's still 28 left fighting this small market share.
  • This really is a great victory for the people of Britain.

    Now that these pay day lenders are out of business, the need for cheap, easy and quick money will die with it.

    Or

    The people who would have gone to these lenders, albeit with minimal regulations and guidance, will now visit Frank. He is regulated by Dave Knuckles and Sledge Hammer Charlie. They tend not to operate within the FCA guidelines.

    The naivety of MSE journailsm, never fails to astound me. They have their mini crusades against the tyranny of finance, and claim victories on figures that not even politicians would use. Never once looking up from their blinkered views on the evils of the financial industry and the oh so weak and vulnerable UK population.

    One day, they will shock me, they will produce an article, with a balanced and constructive view on a subject matter. Then taking that information, and providing an opinion not based on shock statistics.
    Maybe

    Great day for loan sharks..
  • psyman17psyman17 Forumite
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    Does anyone know which ones have quit?
  • edited 15 August 2013 at 11:15AM
    PincherPincher
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    edited 15 August 2013 at 11:15AM
    Voluntary Euthanasia by loan shark.

    People who have a death wish who used to go to Switzerland can now borrow money from loan sharks. Ideally, they should get some life insurance, since being killed by loan sharks does not count as suicide, not even assisted suicide. Totally legal, and I think the beneficiary gets the pay out tax free.

    It is self-financing. You borrow £1,000 from a loan shark to pay the insurance premium. It is tax effcient to boot. I think Goldman Sachs should offer me a partnership straightaway, although I want an iron clad contract that they will not get my soul when I die.

    Like the solar panel industry, a secondary market will open up. PPI is so yesterday, you will now get cold calls that goes:

    "Is life dragging you down? Do you want to end it all? Worried about your family when you are gone? Trouble yourself no logner. We will introduce you to a local worker, who will end your suffering soon enough. All you have to do is borrow from him, buy some life insurance and assign the pay out to us and we will pay out a monthly annuity to your family on an agreed schedule. If you sign up today, we will throw in a free funeral of your choice."
  • I have worked as a Manager in the payday loan sector for the past 10yrs, for the first 8 with a small independent which was then sold to one of the big boys.
    I loved my job with the independent, it was a personal service and was tailored to individual needs, and when people were in trouble we stepped in and did what we could to help. Having worked there for such a long time I knew my customers, and we were always careful when signing people up, by looking at bank statements and checking whether people had loans elsewhere etc, there was an unwritten rule in the early days between lenders where we marked cheque books in a way which we each understood.
    From my observation there are only a small percentage of people who use these loans in the right way. The rest are people already in trouble, which in the majority of cases is why they are standing on your doorstep. Their choices have already gone, and we all know what people are like when backed into a corner. A lot were spending next months wages, but were aware and dealt with it accordingly.
    And then the big boys took over, and boy was it different!
    We were set targets, and pressurised into cross selling payday loans to everyone, whether they were doing a money transfer, (they might need to send more money abroad), cheque cashing, (that cheques not very big, they might need more cash), selling currency, (they might need more spending money, or they might be short of cash when they get back from their holiday), pawn broking, (they must be in need of more cash if their pawning gold).
    They don't pay very good wages either, most of the counter staff are on the minimum wage, and the targets mean that employees get a bonus if reached, and most of them are very young.
    This meant that two months after they took over I was subjected to a disciplinary action because I refused to do what they asked, citing the fact that I thought that what they were doing was wrong, ie: targeting already vulnerable people, I was told that it was only my opinion, and was issued with a final written warning.
    I was very stressed due to the fact that I could not build up a rapport with customers, the personal touch had been taken out of my hands and I was just there to lure people in as I saw it, I also realised that they cared neither for their customers or their staff, both were just a commodity, easily replaced by somebody else.
    In the end I could no longer work for a company that I felt utter contempt for, so I resigned.
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