How Far Is The Government Responsible For Stupidity?

[DangerUXD]

http://www.bbc.co.uk/news/business-21683739
At what point must people take responsibility for their own finances?

[ludwig]

Part of the government's job is to help protect the vulnerable (including the stupid) from those who would seek to exploit them.

That's all they're doing here.

[emmie]

i actually think this is a good thing, people don't necessarily see the dangers of getting these loans, and by the time they do, it's too late..

[DangerUXD]

so when they see 4734% that's doesn't ring any sort of alarm then?

[ludwig]

^ Nope. They're stupid remember - or desperate.

[emmie]

desperate, not always stupid, if you look at bank loans and these are legit, the interest rates are very high, perhaps if people who haven't a bank account, or means to ask for a loan from a bank are brassic, then what should they do?

[Gromit]

The Government is absolutely responsible for regulating money lenders.

We elect them to serve the public's interests and make sure these finance companies are playing fair.

But it can't be easy for the Conservatives to fulfil that function when they are taking party donations from the very people they are supposed to regulate.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/loans/9613729/Loan-firms-wonga-buys-the-ears-of-ministers.html

[emmie]

so money lenders didn't exist before the tory/lib dem coalition...

[Gromit]

Why is 4734% interest legal?

It shouldn't be.

[LazyGun]

How are these 2 concepts mutually exclusive? Yes, people should take more responsibilty for their money, but the government has a right and an obligation to regulate the financial sector too - the alternative is a system in which loan sharks, and other unscrupulous agencies are able to prey on the financially destitute and/or the desperate with impunity.

[Gromit]

Money lenders have always existed em, that is why every Government (of whatever party) has attempted to control them.

If you have any evidence of the previous Labour Government being compromised in that task by taking bribes (sorry, party donations) from the loan sharks, then I will be happy to read your link.

[emmie]

i agree it shouldn't, i was on the bus the other day, which had an ad inside the bus for one of these companies, the interest rate at 4 thousand something, i was shocked that the bus company puts them in their buses for a start and the rate of interest was truly shocking.

[ludwig]

// Why is 4734% interest legal?
It shouldn't be. //

I think these rates are a bit misleading. If a business lent someone 10 quid and said give us back eleven tomorrow, it wouldn't seem too unreasonable, but I believe it would work out as a gazillion apr. That's where these silly numbers come from - short term loans.

(Is there a mathematician in the house who can confirm my figure of a gazillion?)

[emmie]

the Labour party happily takes money from the unions, though they may not be wonga wonga.com they are very influential, and we know that millionaires have donated money to the Tories as well as to the Labour party, it's not exactly secret,

[emmie]

some poor soul was bemoaning her lot on one tv news report, borrowed say a hundred pounds, a month later she owed 5 grand, don't ask me how, or why she took the money, or whether she repaid it but that is the big problem, the interest rates go up substantially, and some of these companies are no better than loan sharks, come to think of it they are loan sharks...

[Bazile]

Some people have no choice , apart from going to loan sharks .

Another company that charges extremely high interest rates is Brighthouse
( formerley Crazy Georges )
It appears that their company policy is to open stores in so-called 'deprived' areas where there will be a high proprtion of people living on benefits and/or in low-paid work & where they are more likely to have plenty of punters with no hope of getting credit anywhere else .

When they tried to open in France their trading standards people described it as "an attack on the poor". They ended up having to abandon France through politicians standing up to protect the most vulnerable members of society. I just wish we had politicians like them.

[DangerUXD]

"The Government is absolutely responsible for regulating money lenders. "
yes but should the public also have some responsibility for their own actions?

"why is 4734% legal it shouldn't be" - the problem here is the focus on the apr and yes it is out of order but we should not lose sight of the actual transaction here. If I lend you £10 and in a week you give me £12 that is essentially about 1000%apr+ but in reality its £2!

[DangerUXD]

sorry lidwig didn't read your answer in time!

[Bazile]

//"The Government is absolutely responsible for regulating money lenders. "
yes but should the public also have some responsibility for their own actions//

In the main , yes .
However some people may have little choice , for whatever reason