MSE News: Payday lenders to share real-time information on borrowers

Former_MSE_Helen

"Payday lenders are to use an information sharing service on consumers' borrowing habits to help improve loan decisions..."

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Payday lenders to share real-time information on borrowers




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michael1983l

The payday lenders don't care if the borrower has multiple loans, this is just paying lip service to the government as they will still dish them out to people anyway. The most profitable customer for the Payday Lender is that of which who will roll over their loan. The more loans they have the more likely they are to roll the loan over.

the sceptic in me leads me to believe that the lenders will use this information specifically to target these customers who cannot afford to borrow rather than use it to prevent them borrowing.

antrobus

michael1983l wrote: »

... The most profitable customer for the Payday Lender is that of which who will roll over their loan. The more loans they have the more likely they are to roll the loan over.......

On the contrary. The most profitable customer for the Payday Lender is the one that actually repays the loan. Even the dumbest Payday Lender will twig that there is a correlation between defaults and roll overs.:)

michael1983l

antrobus wrote: »

On the contrary. The most profitable customer for the Payday Lender is the one that actually repays the loan. Even the dumbest Payday Lender will twig that there is a correlation between defaults and roll overs.:)

Then why did the government review say the opposite then?

rizla_king

The most profitable will be one who rolls over the loan multiple times, or defaults, incurring huge amounts of extra fees and interest, and THEN pays it off.

Aquamania

michael1983l wrote: »

The payday lenders don't care if the borrower has multiple loans, ....

Hopefully you are correct.

Otherwise those who are forced to use PDLs when all other legitimate avenues of credit are denied to them will be forced back to the unregulated and illegitimate lenders. :eek:

antrobus

michael1983l wrote: »

Then why did the government review say the opposite then?

Presumably you mean the OFT compliance review? It merely stated that "encouraging rollovers is a deliberate commercial strategy for some firms".

rizla_king wrote: »

The most profitable will be one who rolls over the loan multiple times, or defaults, incurring huge amounts of extra fees and interest, and THEN pays it off.

Well quite. But it's the paying it off that's the key. It's the ones that don't that cost.

michael1983l

Aquamania wrote: »

Hopefully you are correct.

Otherwise those who are forced to use PDLs when all other legitimate avenues of credit are denied to them will be forced back to the unregulated and illegitimate lenders. :eek:

Yeah, yeah, I've heard that one before as a legitimate reason to have payday lenders. Answer me this, have you ever tried to find a loan shark? I have and guess what it is impossible, as I tried very hard at one time but didn't even get close to finding one. So how do all these people driven to illigal lenders as you put it, actually obtain these loans in the first place. I genuinely will be interested to find out just how they do it.

michael1983l

antrobus wrote: »

Presumably you mean the OFT compliance review? It merely stated that "encouraging rollovers is a deliberate commercial strategy for some firms".




Well quite. But it's the paying it off that's the key. It's the ones that don't that cost.

Very few people actually end up not paying anything at all in reality, even if they default. Without going bankrupt it is difficult to get away with not paying anything and bankrutcy is a bit of an extreme measure just to get one over on a payday lender don't you think?

Herzlos

antrobus wrote: »

Well quite. But it's the paying it off that's the key. It's the ones that don't that cost.

I'm sure they won't be too upset if someone defaults after rolling it over a couple of times and paying back more than the capital in interest.

Apples2

michael1983l wrote: »

Answer me this, have you ever tried to find a loan shark? I have and guess what it is impossible, as I tried very hard at one time but didn't even get close to finding one.

That's because there are Payday Loans readily available.

They will appear quick enough if PDL's started disappearing.

Shutting off the supply in no way shuts off the demand.

Ironically you have even gone searching for a Loan Shark despite having a few dozen payday loans so you can't go suggesting there is no market.