MSE News: Payday loan adverts reported to watchdog

GingerFurball_2

matttye wrote: »

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.

Yeah if you don't have an emergency fund and your options are either to let the DD bounce and incur a charge or to see the DD go through and pay unplanned overdraft charges, it can actually be cheaper to borrow from Wonga, pay the DD and pay Wonga back.

Of course the payday lenders should be checking affordability, but this would hit their profits so until they're more strictly regulated we're still going to see people suffer misery as a result. Reigning in how payday lenders can advertise is a positive step towards controlling the industry.

50Twuncle

I thought that loan companies had to show the APR in their ads as well ?
Wonga fails to do this - even in the small print on their TV ads ....
They are known to charge up to 4,214% - which should be illegal - but somehow they get away with it .....

Money-Saving-King

GingerFurball wrote: »

If I brought out a new beer and tried to advertise it by suggesting that drinking 10 of them a night would make you irresistible to the ladies and would make you a huge success at work, then that advert wouldn't see the light of day

I don't see that's the same thing unless you're suggesting they give an indication the loan doesn't have to be paid back. Then surely it's down to responsibility. If there's people out there who borrow a grand or whatever without even questioning how they have to repay it surely they are the ones to blame not the payday loan companies,

Money-Saving-King

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.

Just like the borrower could work out if they can afford the loan.

The borrowers choose to borrow without adequately considering affordability.

Money-Saving-King

50Twuncle wrote: »

I thought that loan companies had to show the APR in their ads as well ?
Wonga fails to do this - even in the small print on their TV ads ....
They are known to charge up to 4,214% - which should be illegal - but somehow they get away with it .....

I don't think should have to at all. That's not how their loans work. As long as it's clear to the people who borrow what they have to pay back (which it always is) then the APR is completely irrelevant which lets face it has nothing to do with short term loans the clue being with the letter A - Annual!

Justin888

Hi, I am new to this forum but as a customer of Microlend, what is my position regarding future payments to them now that they have had their license suspended ? should I pay or is the loan now unenforceable ? any advice would be gratefully received.

Justin888

Hi - does anyone know if a loan is enforceable if the lender has their license withdrawn by the OFT? Cheers:j

GingerFurball_2

Money-King wrote: »

I don't see that's the same thing unless you're suggesting they give an indication the loan doesn't have to be paid back. Then surely it's down to responsibility. If there's people out there who borrow a grand or whatever without even questioning how they have to repay it surely they are the ones to blame not the payday loan companies,

Well that's the thing - the subtext of a lot of payday loan advertising seems to be " want some free cash to spend on !!!!? Give us a call and get the money in 15 minutes!"

One or two of them even advertise a lack of credit checks as a good thing. Wonga is one of the only PDL companies who actually seem to mention repayment in their advertising.

matttye

Money-Saving-King wrote: »

Just like the borrower could work out if they can afford the loan.

The borrowers choose to borrow without adequately considering affordability.

A lot of the time out of desperation.

Not only that, but borrowers borrow only for themselves whereas PDLs lend to thousands. I think they arguably have a higher duty of care than the individual.

BRITGUY

I cannot envisage debts becoming unrecoverable - would suspect similar scenario as there was with Toothfairy, debt recovery company getting involved.