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Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

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Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Thu Jan 05, 2012 3:53 am

CHARITY SHELTER REPORT IN TOO PAY DAY LOANS. WITH 4,000% APR INTEREST RATES.

I know that one Labour MP has been battling to end pay day loans with interest rates of 4,000% APR and up to know this banal government has refused to look at this issue. yet Cameroon told us all at his Manchester Tory Conference that people should pay off personal debt? Yet once more we see the City of London and the money men giving and openly encouragaging reckless acts of personal borrowing too the poor and needy who are desperate to keep a roof over there heads and food on the table with know thought to the long term consequences to either the people who borrow these loans at 4,000% APR or the other family members who are court up in this. I believe that these companies criminally irresponsible and need Government regulation to control them before it get out of hand totally. What do you think should be done about this sort of immoral lending? is it right that this banal Government once more say's nothing at all when it comes to there friends in the financial sector?

The Report
One in seven Britons has turned to credit such as a payday loan or unauthorised overdraft to help cover their rent or mortgage in the last year.

Shelter, who carried out the research, has warned that relying on such methods could lead to people losing their homes.
The figure equates to almost seven million people when projected on a national scale, the charity said.
And it has urged those sinking into a "spiral of debt" to seek immediate help.
Shelter found that 2% of people have used at least one payday loan to fund their rent or mortgage in the last year, equating to almost one million people nationally.
It said such loans, which are intended for short-term use and can charge as much as 4,000% APR in some cases, are an "unsustainable" way of paying for housing.
Campbell Robb, chief executive of Shelter, said: "These shocking findings show the extent to which millions of households across the country are desperately struggling to keep their home.
"Turning to short-term payday loans to help pay for the cost of housing is totally unsustainable. It can quickly lead to debts snowballing out of control and can lead to eviction or repossession and ultimately homelessness."[/b]
The Shelter report will fuel concerns about people seeking high-interest credit, following a report from insolvency trade body R3 last month which predicted payday loan companies will see a surge in demand in the coming months as Britons struggle with their finances.
The Office of Fair Trading is planning a review to ensure businesses are complying with responsible lending rules amid criticism of the payday loan sector.
The Consumer Finance Association (CFA), which represents businesses offering short-term loans, stresses on its website that payday loans are designed to be repaid typically within a month and a half and they are not appropriate if a large sum of cash is needed to be paid back over months or years.
Martin Lewis of MoneySavingExpert.com said: "It's incredibly worrying there's now evidence of people using payday loans to meet housing costs.
"While it's an obvious temptation to grasp these loans as a lifeline, in the long run it may hurt more than help."
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Gillian Guy, Chief Executive at Citizens Advice, said

“As the payday loan industry grows, we have seen a four-fold increase in the number of people with payday loans coming to us for debt advice in the first quarter of this year, compared with the same period two years ago.

We are concerned that some of the people we are seeing seem to be using payday loans to deal with existing financial difficulties. 40% of people we see with payday loan debt have another high-cost credit loan and on average, CAB clients with payday loan debts had eight debts, while those without payday loans had five. Our evidence therefore suggests a pattern of people in long-term financial difficulty with other debts, who are much more likely to take out a payday loan to try and deal with these problems.

And yet, the payday industry remains inadequately regulated. We have seen financially vulnerable consumers unprotected from a variety of unfair practices carried out by payday lenders. Some have been able to take out unaffordable and unsuitable loans, see their debts balloon, and are offered multiple rollovers. When they are unable to pay, many are then subject to aggressive collection practices.

Many people are lost in a system that offers little protection and inadequate access to affordable credit. The Government must now deliver a much more powerful consumer credit regulation framework to protect financially vulnerable people from credit dependency and unmanageable debt.”
http://www.citizensadvice.org.uk/press_20111207-2
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by sickchip on Thu Jan 05, 2012 6:26 am

Scary stuff, Stox.

I imagine we'll see a rise in repossesions over the next few years. People will be queueing outside local housing offices to get some of that 'social housing'.........erm! hang on, what do you mean? There is none available!
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by astra on Thu Jan 05, 2012 9:00 am

payday bank .co -


"Representative APR 1737% (variable)
Example on a loan of £300 for 28 days:
Amount payable - £375 / Interest - £75
Interest rate – 1737% p.a."

It tells you on the front page.


This is far far too easy!! Fraud worries me!
Too easy to take an address from the voter's roll and fill in details.


Question!

Where does the defrauded citizen stand in this case? Coz Bailiffs is going to be queueing up at your/my front door if fraud does take place?



everythingpayday come out with the following -

"1737%APR Representative: Representative Loan Example: Borrow £300 for 30 days, Amount payable - £375, Interest - £75, Interest rate (pa) - 1737% (variable)

To draw a comparison, a short term loan is similar to treating yourself to go and watch your favourite music band/group perform. A single concert ticket could cost £100 for a gig lasting 90 minutes. However, to annualise this, your ticket would cost £584,000 or 5840% APR!"



I cannot see what a gig ticket has to do with a loan!! They are trying to convince the desperate person that taking a loan with them is benign, friendly and as innocent and casual as buying a ticket to see robbie williams or whoever!
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Thu Jan 05, 2012 11:46 am

It takes 2 to Tango.

Every irresponsible Loan has an irresponsible Borrower.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by sickchip on Thu Jan 05, 2012 1:42 pm

Greed attracts the desperate.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by blueturando on Thu Jan 05, 2012 4:21 pm

A maximum and realistic interest rate should be set in law by the government. These rates are just legalised robbery of the most needy

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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Thu Jan 05, 2012 5:26 pm

Many Countries are in financial difficulty right now because they are having to borrow money to repay their debts. If entire Nations can't see the futility of such action, how can individuals be expected to get it right?
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Fri Jan 06, 2012 2:56 am

blueturando wrote:A maximum and realistic interest rate should be set in law by the government. These rates are just legalised robbery of the most needy

Well I could not agree more with your post
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Fri Jan 06, 2012 2:59 am

sickchip wrote:Scary stuff, Stox.

I imagine we'll see a rise in repossesions over the next few years. People will be queueing outside local housing offices to get some of that 'social housing'.........erm! hang on, what do you mean? There is none available!
very good point too

Its very Scary stuff Sickchip. Many young folks with be getting into debt and homeless at the same time.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Fri Jan 06, 2012 3:01 am

sickchip wrote:Greed attracts the desperate.

it does very much so.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Fri Jan 06, 2012 3:15 am

[quote="astra"]payday bank .co -


"Representative APR 1737% (variable)
Example on a loan of £300 for 28 days:
Amount payable - £375 / Interest - £75
Interest rate – 1737% p.a."

It tells you on the front page.


This is far far too easy!! Fraud worries me!
Too easy to take an address from the voter's roll and fill in details.


Question!

Where does the defrauded citizen stand in this case? Coz Bailiffs is going to be queueing up at your/my front door if fraud does take place?



everythingpayday come out with the following -

"1737%APR Representative: Representative Loan Example: Borrow £300 for 30 days, Amount payable - £375, Interest - £75, Interest rate (pa) - 1737% (variable)

To draw a comparison, a short term loan is similar to treating yourself to go and watch your favourite music band/group perform. A single concert ticket could cost £100 for a gig lasting 90 minutes. However, to annualise this, your ticket would cost £584,000 or 5840% APR!"



I cannot see what a gig ticket has to do with a loan!! They are trying to convince the desperate person that taking a loan with them is benign, friendly and as innocent and casual as buying a ticket to see robbie williams ]


A very good Reply this. as this is what is so wrong about it

They are trying to convince the desperate person that taking a loan with them is benign, friendly and as innocent and casual as buying a ticket to see robbie williams ]

What we have here is open financial sector abuse of desperate people. more so young people who have no real understanding of what this could cost them.

I had not even thought of this.....Where does the defrauded citizen stand in this case? Coz Bailiffs is going to be queueing up at your/my front door if fraud does take place? I will try to find out. but this loan business is very worrying to me.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Fri Jan 06, 2012 9:42 am

Too easy to take an address from the voter's roll and fill in details.

There are two separate versions of the Electoral Register. The complete "official version" is not made available to the general public. The full register is used only for elections, preventing and detecting crime and checking applications for credit. The edited register is available for general sale and can be used by other organisations for commercial activities such as marketing.

Your name and address will appear on the full register which is available for inspection, under supervision, at your local council's offices. You can choose on your registration form whether or not to appear on the edited register.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Sat Jan 07, 2012 12:55 am

oftenwrong wrote:Too easy to take an address from the voter's roll and fill in details.

There are two separate versions of the Electoral Register. The complete "official version" is not made available to the general public. The full register is used only for elections, preventing and detecting crime and checking applications for credit. The edited register is available for general sale and can be used by other organisations for commercial activities such as marketing.

Your name and address will appear on the full register which is available for inspection, under supervision, at your local council's offices. You can choose on your registration form whether or not to appear on the edited register.

Well I never knew that you choose to do this at all. interesting ofenwrong
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by astra on Sat Jan 07, 2012 12:47 pm

Every irresponsible Loan has an irresponsible Borrower.




So true OW


Then there is the Sky Bingo (and all of the rest!)

Join up and have free play to the value of £20.00 - £50.00 Furree Grraatis an' fer nowt! (allegedly)
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Sat Jan 07, 2012 4:57 pm

"Pay-day Loans" are coming under increasing fire from the Press. One sensible suggestion is to outlaw the trap of roll-over lending. A lot of the danger for the unwary lies in the ease with which increasing-size loans are extended until you quickly reach a stage where the debt cannot be repaid.

If the Law required the first debt to be fully repaid before any further loans could be advanced, things should stay manageable.

But it's always going to be a lousy way to live.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Thu Jan 12, 2012 4:01 am

oftenwrong wrote:"Pay-day Loans" are coming under increasing fire from the Press. One sensible suggestion is to outlaw the trap of roll-over lending. A lot of the danger for the unwary lies in the ease with which increasing-size loans are extended until you quickly reach a stage where the debt cannot be repaid.

If the Law required the first debt to be fully repaid before any further loans could be advanced, things should stay manageable.

But it's always going to be a lousy way to live.

Not many years ago these sorts of loans would been run by loan sharks or shylock lenders who where almost outlawed in law. yet like most things companies have found away around this today. It all sounds so easy on the TV adds and this in turn is leading unwary poorly paid people into temptation. its far too easy for these companies to tempt people. oftenwrong makes a very fair point about one debt must be repaid at a time. but there has too also be some sort APR limit put in place as well.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Thu Jan 12, 2012 10:39 am

Many people have heard of "lateral thinking" which has been subverted by the business community who like to refer to "thinking outside the box."

Taking a sideways look at the matter of Loan Sharks, their very existence confirms my belief that the majority of British people are totally honest - why else would they go further into debt in order to pay off money they owe?
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Sat Jan 14, 2012 4:06 am

oftenwrong wrote:Many people have heard of "lateral thinking" which has been subverted by the business community who like to refer to "thinking outside the box."

Taking a sideways look at the matter of Loan Sharks, their very existence confirms my belief that the majority of British people are totally honest - why else would they go further into debt in order to pay off money they owe?

I cannot agree more.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Fri Jan 20, 2012 3:09 am

A new survey has shown that payday loans are making consumer debt problems worse in the UK, with up to 41 per cent of people admitting their own financial troubles are a result of payday lending.

The charity Debt Advice Foundation (DAF) conducted the survey, which showed rapid growth in the number of people taking out payday loans and later ending up with debt problems. One in four of those using this credit option did so in order to pay for food, household essentials or bills, whilst 44 per cent used them in order to tackle other debt problems.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Fri Jan 20, 2012 11:14 am

"One in four of those using this credit option did so in order to pay for food, household essentials ...."

Hold it right there, Borrowers!! If you cannot even eat without borrowing, you absolutely MUST get independent help, from the Citizens Advice Bureau or similar organisation. A problem shared is a problem halved. Do it today.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by sickchip on Fri Jan 20, 2012 12:37 pm

I had a dodgy loan company phone me a few times, and repeatedly told them I wasn't interested; but the phone calls persisted (don't know how they got my (mobile) number).

The last time they called I said I was interested and kept the 'salesman' on the phone for 20mins giving details, etc. He then asked how much I'd like to borrow to which I replied '£850,000 please'. He was unable to help and strangely enough the annoying calls have now stopped.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Fri Jan 20, 2012 5:22 pm

only £850,000 ? Cheapskate. You'll never compete with a hedge-fund manager.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Phil Hornby on Fri Jan 20, 2012 5:34 pm

I have always failed to understand how one can afford anything, which effectively costs a lot more in a couple of weeks, that one couldn't afford at a lower price this week.

It's possibly why I never 'made a million'... Shocked

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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Fri Jan 20, 2012 7:32 pm

There really is just one thing to understand. You borrow money only to make a profit from the transaction.

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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Sat Jan 21, 2012 4:07 am

oftenwrong wrote:"One in four of those using this credit option did so in order to pay for food, household essentials ...."

Hold it right there, Borrowers!! If you cannot even eat without borrowing, you absolutely MUST get independent help, from the Citizens Advice Bureau or similar organisation. A problem shared is a problem halved. Do it today.

Very wise bit of advice C.A.B. but the law need changing still.... all said and done, in my view
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Sat Jan 21, 2012 10:06 am

Whereupon somebody will refer to "The Nanny State", no doubt.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Stox 16 on Sun Jan 22, 2012 2:18 am

oftenwrong wrote:Whereupon somebody will refer to "The Nanny State", no doubt.

Well if it comes down to a Nanny state or a rip off, I will go with the Nanny state every time. as I pay for a government to go to work and not spend its time sitting doing nothing at all. I always find myself laughing when I hear the Right wing talk about a minimalist Government. Hell, I just wish I could say I will run my own company with minimalist management? in other words we have to pay for a lazy Government who do not wish to do a full days work. well Tories and the Right wing my well wish to pay for some minimalist lazy Government who find running the economy too much like hard work. but I do not. if you go into Government then i expect to see them working and not coming out with minimalist activism. Hell next time your boss ask you to work, just turn around and tell him your having a minimalist work day? see what he says about that? yet the Right wing think this is OK?
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by whitbyforklift on Sat Dec 08, 2012 12:37 pm

I think a lot of the problem is making adverts so colourful and making it sound so easy to get money fast.If greedy well known people like Nicholas Parsons would stop doing voice overs for these adds people might think twice.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by Ivan on Sat Dec 08, 2012 1:11 pm

Stox 16 wrote:-
I always find myself laughing when I hear the right wing talk about a minimalist government.
What the Tories mean is they want to switch power from politicians, who can be held democratically accountable, to corporations (preferably contributors to their corrupt party), which can make decisions beyond any semblance of our control.

Tory talk of small government is just nonsense. The measures which Tory regimes take to shrink the state invariably increase the need for more police, prisons and social services.
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Sun Dec 09, 2012 5:28 pm

So many of these Right-wing half-baked ideas have their origin in the USA, where nothing must be allowed to impede the making of money.

Republican sympathisers hate the idea of government "Red Tape" such as safety at work regulations, statutory wage levels, redundancy pay/sick pay/maternity pay/etc.

It's obvious with the benefit of hindsight that when the Tory-led coalition was formed in 2010 they had powerful influences from Murdoch-introduced "Advisors".
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by tlttf on Wed Dec 12, 2012 5:53 pm

Minimalistic in government means less mp's to do the same work, not less work, just think of the expenses alone saved never mind the wages. Makes sense to me.

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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by oftenwrong on Wed Dec 12, 2012 7:28 pm

Do MPs take out "pay-day loans"? Isn't the trough deep enough for them?
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Re: Pay Day loans with 4,000% APR interest rates; is this moral or just plain criminal?

Post by tlttf on Thu Dec 13, 2012 6:51 am

Wouldn't know OW, I struggle to believe anybody does. I remember the "tally man" coming round on a friday night with me mam saying "tell him we're not in" and him smiling and telling me he'd back next week.

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