MSE News: Payday loan adverts reported to watchdog

Monkeyballs

Credit-Crunched wrote: »

By that rationale the new VW Golf advert that gives the owner a sense of joy and superiority should also be banned?

Payday loans lead to stress, alcoholism leads to liver failure... Buying a VW Golf leads to ridicule but the only mental/physical damage done is if it hits you LOL and I know from experience that even smaller cars hurt...

MB

matttye

BillJones wrote: »

Not in any rational world, and certainly not in this one, whne the borrower has about a thousand times more knowledge of what they can afford than the lender does.

You realise the lender could ask for a full statement of means, wage slips and bank statements before lending to a customer right?

These payday lenders choose to lend without adequately considering affordability.

Monkeyballs

matttye wrote: »

You realise the lender could ask for a full statement of means, wage slips and bank statements before lending to a customer right?

These payday lenders choose to lend without adequately considering affordability.

They could, and probably should but they currently don't have any legal obligation to do so (as far as I'm aware) and considering the number of loans being taken out what would the cost be to the lender ? Cost which would be passed back to the customer hiking up the amount owed even further... Not to mention the additional time it would take as there would always be a backlog of applications...

At the end of the day if the customer lies and are found out should they be held accountable for the fraud?

MB

BillJones

matttye wrote: »

You realise the lender could ask for a full statement of means, wage slips and bank statements before lending to a customer right?

These payday lenders choose to lend without adequately considering affordability.

Yes, I do realize that. If they did so, they could start to approach 50% responsibility.

And you, you do realize that adults who take responsibility for themselves tend end up living the sort of life that you think only exists in adverts?

Have you never joined the dots, between your refusal to act as an adult, and your current situation?

matttye

Monkeyballs wrote: »

They could, and probably should but they currently don't have any legal obligation to do so (as far as I'm aware) and considering the number of loans being taken out what would the cost be to the lender ? Cost which would be passed back to the customer hiking up the amount owed even further... Not to mention the additional time it would take as there would always be a backlog of applications...

At the end of the day if the customer lies and are found out should they be held accountable for the fraud?

MB

Yes I agree - they should be held accountable.

I think the lender has a responsibility to carry out affordability checks on customers though. A lender that lends to thousands upon thousands of people who cannot afford to repay is far more damaging to society than people who are desperate for money.

There have been dozens of reports and payday loans being given to people on benefits, who even said so in the application. Just search 'payday loan on benefits' on Google and you'll see some companies even advertise specifically for people on benefits.

If these lenders didn't lend so irresponsibly, people might be forced to seek debt advice rather than take out more debt!

matttye

BillJones wrote: »

Yes, I do realize that. If they did so, they could start to approach 50% responsibility.

And you, you do realize that adults who take responsibility for themselves tend end up living the sort of life that you think only exists in adverts?

Have you never joined the dots, between your refusal to act as an adult, and your current situation?

My current situation is debt free and saving for a mortgage deposit.

Did you assume that I'm in debt because I have a negative opinion of payday lenders? I wouldn't touch them with a barge pole.

Monkeyballs

matttye wrote: »

Yes I agree - they should be held accountable.

I think the lender has a responsibility to carry out affordability checks on customers though. A lender that lends to thousands upon thousands of people who cannot afford to repay is far more damaging to society than people who are desperate for money.

There have been dozens of reports and payday loans being given to people on benefits, who even said so in the application. Just search 'payday loan on benefits' on Google and you'll see some companies even advertise specifically for people on benefits.

If these lenders didn't lend so irresponsibly, people might be forced to seek debt advice rather than take out more debt!

Totally agree, but until the government take a harder approach (which they are starting to do, especially in the run up to election) on the laws surrounding PDL's then these lenders will get away with whatever they can...

Personally, I'm of the opinion that payday loans are currently a necessary evil as they do serve a purpose but are abused and that's the bottom line.

People abuse the facility and don't use it for the purpose in which it was "intended" but ironically it isn't illegal to abuse them either!

MB

BillJones

matttye wrote: »

My current situation is debt free and saving for a mortgage deposit.

Did you assume that I'm in debt because I have a negative opinion of payday lenders? I wouldn't touch them with a barge pole.

No, I don't assume anything.

I wish you luck in your journey to adult responsibility, and hope that one day you move beyond saving for a deposit. The more responsibility you learn to take, the quicker it will come.

GingerFurball_2

matttye wrote: »

These payday lenders choose to lend without adequately considering affordability.

There's a reason for that.

If you use a payday lender sensibly - and by that I mean take out a small payday loan to cover a bill you'd forgotten about that works out cheaper than your bank's bounced DD/unauthorised overdraft fees - then the lender's only making about £5 for every £50 you borrow.

Whereas Joe Idiot who borrows £500 from Wonga then blows it at the bookies and rolls it over makes them a tidy profit.

matttye

GingerFurball wrote: »

There's a reason for that.

If you use a payday lender sensibly - and by that I mean take out a small payday loan to cover a bill you'd forgotten about that works out cheaper than your bank's bounced DD/unauthorised overdraft fees - then the lender's only making about £5 for every £50 you borrow.

Whereas Joe Idiot who borrows £500 from Wonga then blows it at the bookies and rolls it over makes them a tidy profit.

I think an emergency fund or simply not spending every last penny each month is a more sensible approach to dealing with forgotten bills than using a payday lender. I am of course making the assumption that the borrower could have afforded to pay the forgotten bill had they not forgotten it, because otherwise it seems they wouldn't be able to afford to pay everything as well as the payday loan next month...a sure fire way of getting into the PDL trap that so many find themselves in.

I'm not sure any of what you said negates the payday lender's duty to check affordability though.