5000% APR

[Catweazle]

When does protecting people from their own foolishness become acceptable ? It's like smoking in a way, everybody knows it's bad for their health but some people choose to do it. Do we ban smoking to "help" these people ? Or do we accept that they are adults and can decide for themselves ?

 

Can we decide that an adult is not allowed to borrow money ? Or do we limit the interest rate, knowing that without the high returns required for a short term loan to a risky customer many loan companies will fold and people will not have the option to choose that loan.

 

Personally I'd let the companies trade, but ensure that the costs are made so clear that even the dumbest customer knows exactly what they will be paying back and the consequences of not paying it back on time. I think the law has already done some of this.

 

Related, and worrying, a recent survey asked school kids what they would do if they wanted something and couldn't afford it. You'd expect them so reply "save up", but many replied "payday loan". Some people claim that the adverts screened between kids TV programs are a long-term ploy to get kids to accept it as part of normal life, "grooming" I guess you would call it.

[Blackpowder]

Can't afford it don't buy it and certainly don't borrow money to pay for it seems some people like to live a life of worry BB

Good advice that. How many people have to have the latest in gadgets before paying for the essentials in life, then need to borrow from sharks and land themselfs in deep debt.

 

Blackpowder

[keg]

Very true.

[KFC]

I agree that people are responsible for their own actions and shouldn't take money they can't repay.

 

However, I think the point of the programme was to show that these companies are not, as they may advertise, trying to help someone over a difficult patch but they are deliberately targeting people who they know are desperate and will default so they can charge huge fees.

 

It was also to demonstrate that, though the person you speak to on the phone may appear to have your best interest at heart, they have no physical entity in this country, are purely internet based and all of them are owned by a few massive companies where the money gets funnelled back to.

 

They are no different to neighbourhood loan sharks but because they are 'banks' that our establishments invest in they get away with it.

 

Regardless of what a contract says, a judge will only find on the grounds of what is reasonable. I'd like to see a few people take these companies to court under an administration order and see what they end up paying.

I'll bet the loan company wouldn't even turn up, as happened with my bank that tried to levy charge on charge against a miniscule principal sum.

[islandgun]

Well said KFC

[peck]

The APR (and the A stands for Annual) on pay-day loans can be a bit misleading - they are only meant to be for 30 days - and while they have their place, I think they are dangerous for the vulnerable.

They have to quote the APR for legal reasons. whether its 30 days or 1 year the APR is still equal to 5000% APR

[Dekers]

I agree that people are responsible for their own actions and shouldn't take money they can't repay.

 

However, I think the point of the programme was to show that these companies are not, as they may advertise, trying to help someone over a difficult patch but they are deliberately targeting people who they know are desperate and will default so they can charge huge fees.

 

It was also to demonstrate that, though the person you speak to on the phone may appear to have your best interest at heart, they have no physical entity in this country, are purely internet based and all of them are owned by a few massive companies where the money gets funnelled back to.

 

They are no different to neighbourhood loan sharks but because they are 'banks' that our establishments invest in they get away with it.

 

Regardless of what a contract says, a judge will only find on the grounds of what is reasonable. I'd like to see a few people take these companies to court under an administration order and see what they end up paying.

I'll bet the loan company wouldn't even turn up, as happened with my bank that tried to levy charge on charge against a miniscule principal sum.

 

But that's called business, it happens in every walk of life where anyone is trying to sell anything.

 

As for defaulting, that is the last thing they want, these companies want your money and interest back, they don't want you defaulting!

 

They don't "get away" with anything, they operate within the law, if you don't like their services, don't use them!

Edited January 17, 2014 by Dekers

[islandgun]

Just googled loan sharks uk, people are urged by the government to report unlicenced high interest loan sharks and are given contact details so they may be dealt with, note un-licenced clearly if you are a licenced loan shark then its ok

[KFC]

 

But that's called business, it happens in every walk of life where anyone is trying to sell anything.

 

As for defaulting, that is the last thing they want, these companies want your money and interest back, they don't want you defaulting!

 

They don't "get away" with anything, they operate within the law, if you don't like their services, don't use them!

I agree that is business.

 

I disagree that they don't want defaulters. Borrow £100 get £10 profit, default on the £100 get £1000 profit. When challenged by Dave Fishwick some of the companies wrote off the debt but that was after bagging over £600 with nothing off the principal sum.

My opinion is that they trade on defaulters. The amount they spend on TV advertising alone would not be paid for by timely debt repayment.

 

Since most of these companies are foreign and internet based then I'm not sure that they need a UK credit license?

 

I've got no intention of using credit of any kind if i can help it btw

Edited January 17, 2014 by KFC