Jokes2 mins ago
Oft To Investigate Payday Loans Market
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The Competition Commission say that it expects its investigation to last 18 months. I'm not sure why its going to take so long ? How long does it take to ask the following question ::: "How much APR does your company charge" ?
WONGA, the one with the ludicrous childish advert, that is on the telly every single night charge over 5000 % ! These companies are no better than loan sharks. I'm puzzled why they are allowed exist in the first place.
The Competition Commission say that it expects its investigation to last 18 months. I'm not sure why its going to take so long ? How long does it take to ask the following question ::: "How much APR does your company charge" ?
WONGA, the one with the ludicrous childish advert, that is on the telly every single night charge over 5000 % ! These companies are no better than loan sharks. I'm puzzled why they are allowed exist in the first place.
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But I'm not sure APR is relevant for short term loans- it's only really an issue when loans are rolled over and the amount spirals. For some people the opportunity to borrow £200 and repay £220 one week later is really useful to them. The APR isn't that relevant- the £20 fee is reasonable to them. Firms just wouldn't be able to lend profitably if they were only allowed to charge a fee of say £2 for such a loan.
They exist because people use them. I agree though that they should be forced to do more thorough checks on the ability to repay
They exist because people use them. I agree though that they should be forced to do more thorough checks on the ability to repay
Thanks chrisgel...very illuminating, and from the Daily Mail as well !
Does anyone remember that irritating advert a years back for "Shake-n-Vac"
" Shake n Vac and put the freshness back " Well, its been a long time coming but the WONGA advert knocks Shake n vac into the shade. I don't watch ITV much but when I do and those daft puppets come on, I can't reach for the off switch quick enough !
Does anyone remember that irritating advert a years back for "Shake-n-Vac"
" Shake n Vac and put the freshness back " Well, its been a long time coming but the WONGA advert knocks Shake n vac into the shade. I don't watch ITV much but when I do and those daft puppets come on, I can't reach for the off switch quick enough !
Good to see the indecent profits these companies make eventually end up supporting worthy causes...
// Adrian Beecroft, a major donor to the Tory party, having handed over £593,000 since David Cameron became leader. Mr Beecroft is chairman of Dawn Capital, which has a large stock in Wonga Group. Latest accounts show the company, which is now worth £384m, was worth a mere £17m in December 2010. //
// Adrian Beecroft, a major donor to the Tory party, having handed over £593,000 since David Cameron became leader. Mr Beecroft is chairman of Dawn Capital, which has a large stock in Wonga Group. Latest accounts show the company, which is now worth £384m, was worth a mere £17m in December 2010. //
They offer a service that people want. Their T and C and interest rates are clear and on the website, you can find out exactly how much the loan will cost you before you take it up. Now I agree that these companies should be asking more care over who they lend to but in one breath we don't want a nanny society and in the next, we want legit companies to be put out of business because of service they offer.
I'm afraid I can't really agree with you. To borrow £200 and then pay back 10% more, only 7 days later may indeed be useful to the kind of people that use WONGA, but its even more useful to WONGA !
TV adverts are eye-watering expensive, especially during prime time. It just goes to show how much money these glorified loan sharks are making that they can afford adverts in the first place. Consumer law is supposed to protect the vulnerable form sharp practise.
WONGA and others are no better than the crooks that you see being exposed on Watchdog. They take advantage of the needy and vulnerable, just like the ones that I see every day, going door to door on my housing estate, lending money to the already disadvantaged.
Shysters and crooks, all of them.
TV adverts are eye-watering expensive, especially during prime time. It just goes to show how much money these glorified loan sharks are making that they can afford adverts in the first place. Consumer law is supposed to protect the vulnerable form sharp practise.
WONGA and others are no better than the crooks that you see being exposed on Watchdog. They take advantage of the needy and vulnerable, just like the ones that I see every day, going door to door on my housing estate, lending money to the already disadvantaged.
Shysters and crooks, all of them.
Borrowing £200 and repaying £220 is an option the customer chooses- it isn't forced on them. It suits them. And it's no more expensive than a charge for an unauthorised overdraft or for defaulting on a credit card bill.
I dislike the adverts though - some of the things people shown are using the money for are not a good use of such funds to me- e.g. to boost savings, to buy a washer, to pay for training.start up a business.
But do we need even more of a nanny state?
I dislike the adverts though - some of the things people shown are using the money for are not a good use of such funds to me- e.g. to boost savings, to buy a washer, to pay for training.start up a business.
But do we need even more of a nanny state?
Woofgang and others.... If these companies are not guilty of sharp practise and they always make everything as clear as daylight, why are they being referred by the OFT to the Competition Commission ?
My Guardian link has somehow gone astray since I first posted, so :::
"Announcing the referral, the OFT highlighted several features of the £2bn market, which it said might be preventing, restricting or distorting competition:
• borrowers using payday loans have "poor credit histories, limited access to other forms of credit and/or a pressing need to borrow", which could be weakening competition on price
• lenders are using practices which make it difficult for consumers to identify and compare costs
• there are barriers to switching when loans are rolled over.
It also expressed concern about the focus on quick loans, which it said compromised affordability checks and meant competition was on the basis of speed rather than price. Too many people were being granted loans they could not afford to repay, and there was no incentive for lenders to cut interest rates."
This is why the investigation is going ahead. I repeat these companies are shysters...let them sue me !
My Guardian link has somehow gone astray since I first posted, so :::
"Announcing the referral, the OFT highlighted several features of the £2bn market, which it said might be preventing, restricting or distorting competition:
• borrowers using payday loans have "poor credit histories, limited access to other forms of credit and/or a pressing need to borrow", which could be weakening competition on price
• lenders are using practices which make it difficult for consumers to identify and compare costs
• there are barriers to switching when loans are rolled over.
It also expressed concern about the focus on quick loans, which it said compromised affordability checks and meant competition was on the basis of speed rather than price. Too many people were being granted loans they could not afford to repay, and there was no incentive for lenders to cut interest rates."
This is why the investigation is going ahead. I repeat these companies are shysters...let them sue me !
-- answer removed --
/Does anyone remember that irritating advert a years back for "Shake-n-Vac"/
Interestingly, that 'shake'n'vac' campaign is recognised as one of the most successful ever in the history of TV advertising when measured by continuing consumer awareness (prompted and unprompted).
Its structure is a classic case study and as you (almost) quote Mikey:
" (do the) Shake n Vac and put the freshness back "
the consumer benefit delivered in one line of a jingle. Genius.
Interestingly, that 'shake'n'vac' campaign is recognised as one of the most successful ever in the history of TV advertising when measured by continuing consumer awareness (prompted and unprompted).
Its structure is a classic case study and as you (almost) quote Mikey:
" (do the) Shake n Vac and put the freshness back "
the consumer benefit delivered in one line of a jingle. Genius.
I have already said that I agree that loan companies should be taking more care who they lend to. Since Wonga has been singled out, again I point out that it is simple to find out how much the loan will cost.
I have pointed out before that these companies really don't want to lend money to people who can't afford to repay and who will get into difficulties. The easy money and best return comes from lending to people who repay promptly. Chasing non payment, taking out CCJ's and so on just eats into the profit.
I agree with factorfictions's comment about the advertising though...then again they aren't the only industry with stupid adverts.
I have pointed out before that these companies really don't want to lend money to people who can't afford to repay and who will get into difficulties. The easy money and best return comes from lending to people who repay promptly. Chasing non payment, taking out CCJ's and so on just eats into the profit.
I agree with factorfictions's comment about the advertising though...then again they aren't the only industry with stupid adverts.
I share your distaste for these payday loan companies, Mikey, and like you I find the names grating, especially "Wonga". Unfortunately i think they are a necessary evil, for as long people need short term loans.
There is always going to be people who are unable to access a bank loan - either because they represent a bad risk, having a poor credit history or previous defaults etc, or because a bank loan simply is not the right kind of loan for them - Many people need a short term loan to bridge the gap,as it were and your standard bank loan does not really fit the bill.
Before these payday loan companies, you had a swathe of people who could be taken advantage of by loan sharks, aware of the desperation of their clients, and imposing ridiculous levels of loan repayments in a completely unregulated fashion, complete with coercive threats of violence for default.
So payday loan companies are at least regulated; at least are very clear about the cost of the loan; are bound by law to negotiate where a customer is in danger of default.
As Woofgang says, the worst fault is their lack of credit checks, and lack of co-operation between the different companies. The stories you here of the worst cases of individuals getting into severe debt through these loans are often people who have taken out more than one loan at a time, from different companies.
The OFT do need to check the market, ensure their is genuine competition and proper regulation of the market to protect the customer from usurious rates and their own worst impulses. But I agree with FF - reporting their loan rates as an APR does not really reflect the true situation.
I cannot think of a decent alternative, except to reiterate the advice I have heard from people like CAB - that folks should make much more use of and be far more aware of Credit Unions......
There is always going to be people who are unable to access a bank loan - either because they represent a bad risk, having a poor credit history or previous defaults etc, or because a bank loan simply is not the right kind of loan for them - Many people need a short term loan to bridge the gap,as it were and your standard bank loan does not really fit the bill.
Before these payday loan companies, you had a swathe of people who could be taken advantage of by loan sharks, aware of the desperation of their clients, and imposing ridiculous levels of loan repayments in a completely unregulated fashion, complete with coercive threats of violence for default.
So payday loan companies are at least regulated; at least are very clear about the cost of the loan; are bound by law to negotiate where a customer is in danger of default.
As Woofgang says, the worst fault is their lack of credit checks, and lack of co-operation between the different companies. The stories you here of the worst cases of individuals getting into severe debt through these loans are often people who have taken out more than one loan at a time, from different companies.
The OFT do need to check the market, ensure their is genuine competition and proper regulation of the market to protect the customer from usurious rates and their own worst impulses. But I agree with FF - reporting their loan rates as an APR does not really reflect the true situation.
I cannot think of a decent alternative, except to reiterate the advice I have heard from people like CAB - that folks should make much more use of and be far more aware of Credit Unions......
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