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

VictimOfImpersonation

The PDL companies will be laughing their heads off. They manoeuvred the Parliamentary Select Committee into recommending they all receive immediate access to CRA data.

One Payday lender already had a special relationship with CallCredit before they started their business in the UK five odd years ago - yes, WONGA! They bought the raw data from CallCredit and then decided who they'd aim at.

They have retained a privileged position ever since, because other PDLs have not had up to date CRA data and so asked the Select Committee for it while Wonga smiled on sweetly.

As for rollovers, the PDLs have already agreed to limit rollovers to a maximum of two for the same debt to the same customer, and agreed that they had no way of knowing if a new customer was in fact "rolling over" a debt or multiple debts from another PDL. This has been used as the excuse for the move announced today, but none of them have agreed that a rollover between 2 or more PDLs is in fact any rollover at all - they conveniently failed to mention that even if they could see multiple recent indebtedness they would hardly be shooting their business model in the foot and be terming any consolidation (partial or otherwise) as a "rollover".

Simply put, if they think they can cause their share of this type of bad for the customer business to be profitable and leave competitors (major and cuddly like Wonga. or grey like sharks) holding the baby then they will.

A great deal of time was spent at the last Select Committee discussing "referrals" (of applicants who did not satisfy the top PDLs criteria for lending) to the greyer end of the market. That was another area where the Select Committee failed to get proper commitment for PDLs to desist from doing so.

I really think more bad than good comes from allowing PDLs to have the very latest CRA data. They are almost commercially bound (given the lack of scruples in what passes as commercial interest thesedays) to abuse this further privilege.

Monkeyballs

Hi all,

Maybe I just have friends in very shady places but I wanted to find a shark to lend to me I could have done it fairly easily LOL then again they were "friends of friends" and I knew better than to go near them!

Anyway...

So this is voluntary? I'm guessing that the high street lender, those big names who are the 'the least worst' will sign up and then anyone looking for a loan would start going to the less well known ones who may not be overly pleasant to deal with who don't sign up because if they do then they would be seen to be lending irresponsibly?

I don't think it's a terrible idea in principle I just think it ought to be compulsory for all lenders should be forced to sign up and agree that if the customer is provided funds despite information on the database then that debt is null and void so the customer does not need to repay it and they have their lending license (if there is such a thing, I have no idea!) either suspended pending investigation or revoked completely.

That way no lender would ever lend to someone if there in black and white on the database that the customer was a risk and has an existing agreement with x, y and z lender because they'd be on a guaranteed loser!

The database will have to be updated in realtime however because if I wanted to I could go and lend from 4 PDL's who are all within a couple of hundred meters of each within an hour...

MB

Poppops

michael1983l wrote: »

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.

There is one who lives on my road. He got caught a couple of years ago and was supposed to be selling his house to pay people back as he told the court he had no other assets left.

But he is still living there

Thrugelmir

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, [STRIKE]and THEN pays it off[/STRIKE].

Except they don't. Bad debtors are the bane of every business. Better to do less business with customers that do repay.

Pincher

How much did loan sharks used to charge?

I contend they are charging exactly the same as before, i.e. desperation rate, except they can now legitimately take your chattel with the law behind them.

bigadaj

Pincher wrote: »

How much did loan sharks used to charge?

I contend they are charging exactly the same as before, i.e. desperation rate, except they can now legitimately take your chattel with the law behind them.

Well I don't think wonga charge in broken legs.

Remember a debate on minder many years ago about such transactions and a philosophically discussion about whether the violence acted as a full and final settlement or whether the balance was outstanding, there was a difference of opinion from what I recall.

VictimOfImpersonation

bigadaj wrote: »

Well I don't think wonga charge in broken legs.

No perhaps they let their grey friends deal with the seamier side of debt-collection. Meantime they have just been handed the keys to break you with CRA data when they feel like putting their minds to it.

BillJones

VictimOfImpersonation wrote: »

No perhaps they let their grey friends deal with the seamier side of debt-collection. Meantime they have just been handed the keys to break you with CRA data when they feel like putting their minds to it.

Would you prefer that people get to default and then keep it secret?

VictimOfImpersonation

BillJones wrote: »

Would you prefer that people get to default and then keep it secret?

Yes. Then if you are daft enough to pay yourself from gains taken prematurely from loans to the wrong sort of customer then you might find you had to work to retain your living. That might be no bad thing.

BillJones

VictimOfImpersonation wrote: »

Yes. Then if you are daft enough to pay yourself from gains taken prematurely from loans to the wrong sort of customer then you might find you had to work to retain your living. That might be no bad thing.

No, that makes no sense at all, sorry.

I undertsand that you have a real bee in your bonnet because people have recorded misdeeds, but most of us prefer that your sort don't get to keep your defaults secret.

What you are advocating is that customers get to default, and then stop anyone knowing about it. That's simply idiotic.