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    • Former MSE Helen
    • By Former MSE Helen 28th May 12, 10:08 AM
    • 2,324Posts
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    Former MSE Helen
    'Payday loan self-regulation may be more of a stick than bargained..' blog discussion
    • #1
    • 28th May 12, 10:08 AM
    'Payday loan self-regulation may be more of a stick than bargained..' blog discussion 28th May 12 at 10:08 AM
    This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.





    Please click 'post reply' to discuss below.
Page 1
    • Rafter
    • By Rafter 28th May 12, 2:18 PM
    • 3,837 Posts
    • 1,366 Thanks
    Rafter
    • #2
    • 28th May 12, 2:18 PM
    • #2
    • 28th May 12, 2:18 PM
    I admire your optimism Martin, but I'm not sure the risk of ombudman sanction will be enough to clean up this industry.

    Also not sure that 60 days of non-payment is enough either - unless someone has lost their job or had their debit card frozen, it is likely that a payday loan company will be able to take some money in this time and start the clock running again.

    The bigger stick might be the affordability assessment in my view. If someone can really afford a payday loan without getting into trouble, because of a one off unexpected bill for example, then the credit is probably cheaper than an unauthorised overdraft and could be seen as 'fair' to a consumer.

    The problem is, I think only 10% of current payday loan customers fall into this group and the rest are taking advantage of people who are overstretched and need help or who are incapable of budgeting properly.

    R
    Smile , it makes people wonder what you have been up to.
    • MSE Martin
    • By MSE Martin 30th May 12, 10:55 AM
    • 8,116 Posts
    • 42,310 Thanks
    MSE Martin
    • #3
    • 30th May 12, 10:55 AM
    • #3
    • 30th May 12, 10:55 AM
    I admire your optimism Martin, but I'm not sure the risk of ombudman sanction will be enough to clean up this industry.

    Also not sure that 60 days of non-payment is enough either - unless someone has lost their job or had their debit card frozen, it is likely that a payday loan company will be able to take some money in this time and start the clock running again.

    The bigger stick might be the affordability assessment in my view. If someone can really afford a payday loan without getting into trouble, because of a one off unexpected bill for example, then the credit is probably cheaper than an unauthorised overdraft and could be seen as 'fair' to a consumer.

    The problem is, I think only 10% of current payday loan customers fall into this group and the rest are taking advantage of people who are overstretched and need help or who are incapable of budgeting properly.

    R
    Originally posted by Rafter

    Hi

    Please don't think im saying this self-regulation is close to being enough. Its an improvment but only mildly. The point of the blog is these new weak rules may be more enforceable than people think
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.

    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.

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