Daylight Robbery

S

Stuart Truman

Lifer
 The Cotswolds
A friend who was already on the hairy ragged edge of solvency borrowed a few hundred quid from one of these quick quid type of companies to do an emergency car repair. This was several months and several missed payments ago. Now she owes them over £7000!

This evening on TV I've seen another one of these legal loan sharks offering 12 month loans at 280% APR (or thereabouts). I know none of you will be falling for these bandit's offerings, but please don't let your friends or kids get caught out. Their tactics are nothing short of the mob when you owe them money. Scary stuff :thumbsdown:

Anyway. Rant over...
 
They are all awful.... just preying upon people who are in dire circumstances. And they are all supposed to me tightly "regulated". Just plain wrong. Hope your friend gets it sorted...
 
one of the adverts actually displays 1076% apr (or somewhere close to that), usually aired on dave.

they are ok if you will be paying it back the following week, that's all.

they actually tell you it's not ideal for long term borrowing.
 
Wonga etc are over 2000% APR. You borrow £100 on Monday, and you owe £130 by Friday. It's just crazy

However - Statement from Wonga "We are committed to responsible lending...." - yeah, ok :?
 
How do I get in that game? I won't need to work with those returns.
 
the tactics of the lenders are questionable, however if your friend has missed payments then they have no one to blame but themselves for the amount going up.

the 'lender' will have put in the paperwork what happens if you miss payments etc. but it will be buried in the small print and it had been covered in the press and on TV many times about what can happen.

none of this makes what the 'lender' does right though :|
 
As bad as it looks. It's not really predatory. The interest is on display. one must absolutely read the fine print. If a person is in such dire straits that they aren't 100% sure that they can make the payment/s on time or early. They have no business going near those short term loan agencies. As you said. Your friend was already on the edge of insolvency. If any of her friends or family knew she was going to quick quid. They did her a disservice by not stopping her.

I sure wish your friend the best. And prayers go out to her.

Not to bore everyone. But.
I learned a lesson long ago. My first marriage was ending. I owned a home. I was in the military and if you are single your housing allowance goes away. I would have to move on base to a dorm. But couldn't find a buyer before my pay check dropped. Out of desperation. I called the finance company and asked them about taking the home back. They said they can't do that when you are behind on your payments. I told them that I wasn't behind. They pulled the file and verified. Things changed after that. If one contacts debtors BEFORE they get in trouble. There are options. I owed about what the home was worth. So the finance company said here's what we will do. We will take the home. Your loan will show as paid. And no negative marks on my credit history. All due to swallowing my pride and calling before the loan companies hands were tied by late payments.
 
Its sickening, but you know, they cant blame anyone but themselves dont lend if you cant afford to pay it back! Its not a way out!

The lenders know this too and advertise as a way out. In all honesty in times of hardship quick lones and gambling are very common I think all those ads should be band! And the bloody personal injury ads!
 
There should be a cap on the interest they can charge and a separate charge for arranging and administering the short term loan. That way you don't end up with spiralling amounts to pay back.

From the sound of it, your mates either gonna go bankrupt or get an IVA :thumbsdown:
 
tomscott said:
Its sickening, but you know, they cant blame anyone but themselves dont lend if you cant afford to pay it back! Its not a way out!

The lenders know this too and advertise as a way out. In all honesty in times of hardship quick lones and gambling are very common I think all those ads should be band! And the bloody personal injury ads!
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+1. TBH I thought a while back the companies offering ridiculous APR's like the 1800% were banned, but then as said the small text on the screen in wonga or kwik-cash type adverts the rate is quite often that high. Annoys me one of the adverts at the moment that says something along the lines that even if you're on a good salary it's ok to take a short term loan to cover the last week of the month. No it bloody well shouldn't be! Not if you've been taught some simple financial planning advice! Especially if you're on a good salary it is not difficult to live within your financial limits.

As the old saying goes - a fool and their money are easily parted.
 
The practice of short term loans is always going to be questionnable, but what's the solution?
Someone on a restricted income has to pay a bill on Monday or suffer some consequence and doesn't get paid until Friday, so they borrow £100 for a few days and it costs them say £120.
If a legitimate and registered company doesn't do it then real loan sharks will fill to void and there is a real problem.

Anyone who borrows 'a few hundred, misses several payments' and then has a massive debt needs to question themselves.

Forget the APR - it's just a mathematical formula that includes all sorts of associated costs. Small loans over short periods always show this. Looked at another way would you really expect to lend someone £100 for 3 days at a cost equivelant of say 5% interest and have to pay back £100.03 for a loan granted in minutes with no credit checks (which are expensive)?

Not defending the companies, just know the banking business really well.
 
andysat said:
:thumbsdown:
Click to expand...
To my post or the thread?

cj10jeeper said:
The practice of short term loans is always going to be questionnable, but what's the solution?
Someone on a restricted income has to pay a bill on Monday or suffer some consequence and doesn't get paid until Friday, so they borrow £100 for a few days and it costs them say £120. If a legitimate and registered company doesn't do it then real loan sharks will fill to void and there is a real problem.
Click to expand...
Agreed it's better a legit company not a loanshark is doing it, but as bigdog said above when your needing to pay bills etc, phoning the company in advance is a better option. They'll usually offer some sort of repayment plan or likewise, although it's down to reading the fine print as to whether it'll be more financially prudent than a 1800% APR for a week. If it's a regular cash flow issue then the company in question could probably change the billing date, taking a regular DD a few days later.

It's too easy to assume or stereotype and maybe I've done that when I typed my last post - forgetting that there will be people out there in dire situations, especially in the current climate. I've been very lucky and never experienced that - in times of redundancy I got jobs again quickly and when ill health stopped me working I had the relevant insurances to keep food on my plate. I feel sorry for those who genuinely struggle to do so for their families. However, it's just my humble opinion that the public in general don't seem to be very good at planning for the worst and keeping a small amount of savings accordingly.

For Stuart's friend, without seeming to pry into her finances, it sounds like it'd do her a favour for someone to sit down with her for an evening and help her reorganise her finances.
 
Just a couple of comments:
The people who use these services have probably reached the end of the road, else would not do it. They can't simply change payment dates, set up a dd, etc,

The APR is for the money if borrowed over a year.

All said its not ideal to go anywhere near such companies and speak direct to lenders or take I dependant (and free) advice.
 
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