What Is Your View On This?

[youngmafbog]

Payday lending giant CashEuroNet, which owns Quick Quid and Pounds To Pocket, is the most complained-about banking and credit business.

It's easy to slate these businesses but the alternative is far worse since, as far as I know, these companies dont go round and break a few bones until you cough up.

Interesting though that 2/3 of the complaints are upheld so I guess they are not playing totally by the rules. Will they go the same way as Wonga?

https://www.bbc.co.uk/news/business-45495364

[ToraToraTora]

Interesting question YMB, I hope I can illustrate the problems by my own experience. My mum died in 2010 but she’d have been the sort of person that would borrow from these sources, primarily because she would not usually repay it. Not because she set out to defraud but because it would inevitably transpire that, despite her intentions and efforts she would never have the money to do it. She would know that but still believe it was possible. These lenders pray on people off the pace, who sincerely believe they need the money NOW, regardless of the astronomical interest rate. That does not compute for them, all they know is that they can have £X now to buy something they invariably don’t need or is not as urgent as they think. Now these people cannot borrow from normal sources because they invariably default. These lenders offer a “service” of sorts, they do provide what the borrowers think they need at a cost. If they go bust then I’m delighted but I am also fearful of where people that need them may turn to replace those facilities.

[youngmafbog]

Thanks both of you.

Perhaps if these companies were forced to follow a better code of practice and use approved affordability calculator (its how most finance companies do it) then it would be better. It cant be right they have the highest number of complaints with 2/3 upheld.

Like TTT I would not like to see a wholesale return to the doorstep collector. Many of their rates would make Wonga & Cos eye water!

[Jackdaw33]

The problem is that people with poor credit history cannot get credit cards or overdrafts/bank loans so they have no-one else to turn to. I remember many, many years ago, the Provident check company where you could get a ticket, only valid in certain stores, which you paid back weekly. A woman I knew (this was in the 60s) made a handsome living out of this. People strapped for cash would take out a £10 ticket. They would then take it to her who would give them £5 cash for it. No wonder she had the most luxuriously furnished house in the street.

[cassa333]

Where does someone with poor credit or would fail miserably at an affordability test go?

A lot of these pay day loan companies have HUGIMONGIOUS interest rates because they are short term loans. But people know this. As Spath says they get you to sign and resign and resign again.

I don’t know about when they first came out but they have been more regulated lately (which is why Wonga went down I think).

However if you have a poor credit rating can’t you carefully use these sort of loans, pay them back promptly and get a better credit score? I don’t know how they work but surely regular pay,ents amount to something ?

[Jackdaw33]

I don't think so, Cassa. If you are seen as having to resort to these lenders you will be suspect. There are, however, a few credit card companies on the go who specialise in giving cards to people with poor credit with small limits. Their interest rates are high, but 39% APR is not too bad. No defaults can improve your credit score. The ones which annoy me are stores like Brighthouse, who sell white goods with no credit checks. Their rates are astronomical; a fridge which would cost you £300 in a reputable store will have cost you £1500 by the time you've paid it off.

[cassa333]

Oh I see JD.

I had a friend back in The day who always got a provy loan out for Christmas. The next year it would be a bigger loan to pay off the last of the one before.

It went on for years and we were forever saying not to get one this year. Cut back on Christmas and save for the next. We said she should talk to her children (all adults by then) and explain why Christmas was going to be more about people etc than how much she needed to spend.

She wouldn’t have it though. All the kids and grandkids had to have loads of expensive presents and a feast for two weeks.

[Jackdaw33]

Another big con was Xmas hampers. Paid for on the Never Never and full of crap you would never think of buying.

[Denton]

In response to Jackdaw,When I lived in Gordon Square in the 40s/50s a Woman used to get a Provy Ticket for £10 once a Month,and Raffle it,with over a 100 Houses in the Square she made a massive profit and everybody was happy,providing they won,of course.!!

[Jackdaw33]

Gordon Square? Wallsend? Blow me!

[Denton]

Happy Days those,Jack.

[hc4361]

A short term pay day loan for an emergency can be cheaper than going overdrawn on your current account, provided you pay it back in time, even at Wonga's old rates.

[woofgang]

christmas hampers are still a rip off....I don't know why people just don't set themselves up a savings account.

[Jackdaw33]

If you have an authorised overdraft facility it is by far the cheapest way of borrowing.

[Old_Geezer]

The alternative is to go seek proper help, not fall in with loan sharks, bone breakers or not.

[1rovert]

Owing to a couple of mistakes I made with working out my expenses, and the vet not sending in my claim form, I found not only was I going to be overdraw with my bank account, I was also going to be overdrawn on my overdraft.
Luckily I have good credit with my bank, I was able to update my overdraft, to cover all bills until the pet plan money is paid into my account, I bank with Santander.

[Jackdaw33]

A good point. Trouble arises when you go beyond your overdraft limit, then the costs mount up.