Pay Day Loans = Legallised Loan Sharks...?
Discussion
Derek Smith said:
DonkeyApple said:
Err, £300 fine plus HMRC funding rate is noteably lower than credit card or payday loan debt. So, if you had the brains to generate the profit that resulted in the £10k tax liability you would have the brains to work out that HMRC funding charges are lower than almost any other form of debt, even with a £300 facility charge. 
So interest on the money from 1 February, on a daily basis I believe, plus a £100 fine on each amount (there were three according to them), then further fines later - amount and timing unknown - was the 'brains' way of going about it, was it? Cor! And I went to see an accountant. He worked out the figures for me, taking into consideration the interest I was getting on the money, and he came up with the wrong answer, eh?. More fool me I suppose to go to the professionals when I could have asked on here.
P-Jay said:
anonymous said:
[redacted]
So we agree, the product is perhaps unpalatable, but a useful tool for desperate or unfortunate people. It's the marketing / encouragement to continue to roll over the debt for longer periods or borrow more and more that's wrong.I'm sure that under scrutiny many of these firms would fall fould of FinProm alone, let alone TCF guidelines.
There is also the question of how you pay a payday loan to someone who doesn't have a payday?
We are still living with the legacy of 'Light Touch' regulation.
P-Jay said:
anonymous said:
[redacted]
So we agree, the product is perhaps unpalatable, but a useful tool for desperate or unfortunate people. It's the marketing / encouragement to continue to roll over the debt for longer periods or borrow more and more that's wrong.DonkeyApple said:
It's the lack of regulation as well as the lack of enforcement of the existing regulation.
I'm sure that under scrutiny many of these firms would fall fould of FinProm alone, let alone TCF guidelines.
There is also the question of how you pay a payday loan to someone who doesn't have a payday?
We are still living with the legacy of 'Light Touch' regulation.
Do you know that the current regulations are not being enforced, or is this just an assumption. Perhaps you can flag-up some examples?I'm sure that under scrutiny many of these firms would fall fould of FinProm alone, let alone TCF guidelines.
There is also the question of how you pay a payday loan to someone who doesn't have a payday?
We are still living with the legacy of 'Light Touch' regulation.
ianash said:
DonkeyApple said:
It's the lack of regulation as well as the lack of enforcement of the existing regulation.
I'm sure that under scrutiny many of these firms would fall fould of FinProm alone, let alone TCF guidelines.
There is also the question of how you pay a payday loan to someone who doesn't have a payday?
We are still living with the legacy of 'Light Touch' regulation.
Do you know that the current regulations are not being enforced, or is this just an assumption. Perhaps you can flag-up some examples?I'm sure that under scrutiny many of these firms would fall fould of FinProm alone, let alone TCF guidelines.
There is also the question of how you pay a payday loan to someone who doesn't have a payday?
We are still living with the legacy of 'Light Touch' regulation.
What you can do is look to see how encouraging people with no money into further additional debt and costs, as alluded to above, would fit with TCF guidelines
This is a good link for FinProm: http://www.fsa.gov.uk/Pages/Doing/Regulated/Promo/...
One interesting area is that if you are offering payday loans why would advertsing during working hours on TV be more financially rewarding than in the evenings when the majority of workers are at home watching TV?
. So, if you are targetting people who are not working then is it misleading to refer to your product as a payday loan?DonkeyApple said:
So, if you are targetting people who are not working then is it misleading to refer to your product as a payday loan?
I seem to remember various people on PH suffering from high temperature urine after hearing dolites refer to their gyro day as "pay day" - perhaps their customers know what they mean and are not misled?DonkeyApple said:
ianash said:
DonkeyApple said:
It's the lack of regulation as well as the lack of enforcement of the existing regulation.
I'm sure that under scrutiny many of these firms would fall fould of FinProm alone, let alone TCF guidelines.
There is also the question of how you pay a payday loan to someone who doesn't have a payday?
We are still living with the legacy of 'Light Touch' regulation.
Do you know that the current regulations are not being enforced, or is this just an assumption. Perhaps you can flag-up some examples?I'm sure that under scrutiny many of these firms would fall fould of FinProm alone, let alone TCF guidelines.
There is also the question of how you pay a payday loan to someone who doesn't have a payday?
We are still living with the legacy of 'Light Touch' regulation.
What you can do is look to see how encouraging people with no money into further additional debt and costs, as alluded to above, would fit with TCF guidelines
This is a good link for FinProm: http://www.fsa.gov.uk/Pages/Doing/Regulated/Promo/...
One interesting area is that if you are offering payday loans why would advertsing during working hours on TV be more financially rewarding than in the evenings when the majority of workers are at home watching TV?
. So, if you are targetting people who are not working then is it misleading to refer to your product as a payday loan?I find this quite surprising but it explains a lot.
Derek Smith said:
heppers75 said:
The difference is a right thinking normal person . . .
Oh dear!This January I had a tax bill of a bit over £10,000 to be paid by the 31st or else I'd incur a further charge, £300. The size of the bill came more or less out of the blue. I was able to draw on my savings. Had I not then it would have had to be the credit card.
Consider the effect on someone who didn't have that money and, perhaps, was up to their limit on their card or, even, me about five years ago when illness meant that my carefully planned finances were hit quite hard.
I don't consider myself to be a right thinking normal person. Such a title means little except to the person making the judgement - it probably describes them. However, I was lucky enough to be able to pay the sum, although if another bill comes out of the blue then I will be in trouble. Then, to an extent, I will be exploitable.
Also I again suspect but do not know of courser that by and large the purposes of these loans as used by a majority of the clientele is not to pay tax bills and other essentials or if it is it is in lieu of the fact they have spent the ,oney that should have been spent on those essentials on £100 trainers, Sky, Fags, Booze and other luxuries which they simply cannot afford but simply have to have!
I think there is a danger that we label everybody as vulnerable. People have to be allowed to make their mistakes and pay for them - building in too many safeguards only removes these 'disadvantaged' souls access to any emergency money. People who are desperate for money will go to great lengths to find a lending source. If these borrowers can't pay back their loans then the lender takes a bath - quite rightly so in my opinion. That nobody has shown illegal collection methods are being used, would suggest these firms keep within the law. Some posters have alluded to delinquent loans being passed on to unscrupulous collection agencies. However, no evidence has been offered to support this allegation. I think in reality, these firms build into their charges a high debt ratio to loans. If a single unemployed mother has to replace her childs shoes and she has no money, no family and the Govt won't lend to her, where can she go?
Edited by ianash on Tuesday 7th February 12:29
ianash said:
If a single unemployed mother has to replace her childs shoes and she has no money, no family and the Govt won't lend to her, where can she go?
The JobCentre?I understand what you are saying but at the same time it can be argued that the system is just facilitating and increase in the feckless.
The reality is that you can never save everyone from themselves or their situation but you can cripple yourself trying. As a society you need to draw a line in the sand and I would argue that it is way too low at present.
DonkeyApple said:
The JobCentre?
I understand what you are saying but at the same time it can be argued that the system is just facilitating and increase in the feckless.
The reality is that you can never save everyone from themselves or their situation but you can cripple yourself trying. As a society you need to draw a line in the sand and I would argue that it is way too low at present.
Where do you draw it though? It again becomes an arbitrary decision on what constitutes an acceptable profit for the purveyors of the "never never".I understand what you are saying but at the same time it can be argued that the system is just facilitating and increase in the feckless.
The reality is that you can never save everyone from themselves or their situation but you can cripple yourself trying. As a society you need to draw a line in the sand and I would argue that it is way too low at present.
As someone noted in an earlier post, do you also clamp down on the tv seller offering to spread the cost of a tv to the point where the final cost is 4x that of the product? In all likelihood it's a similar feckless demographic getting lured in.
I am far from believing anyone in this country needs to starve. Harsh as it sounds, it all comes down to cutting one's cloth. If that means going without, so be it. If someone chooses to get into hock instead, and it cripples them, so be that too. We have enough legislation and laws already...arguably too much, which allows shylocks to duck and dive.
I've used one of these companies two or three times before. I'm not hard up on cash, just have an abysmal credit rating due to past stupidity.
I used it to purchase some flights that I needed to buy before payday, which was around 7-10 days away, and it was a useful service. I was willing to pay, and was aware of, the (comparatively) insane interest rates for the convenience and lack of other alternatives I had. The last time I used them was around a year ago. I've since been more sensible with finances, and now have other backups should I need them - and savings to boot.
When I used the service I could easily have spent all my money the next month and had to use them again to buy food - but I didn't. I pulled my belt in for a month, didn't buy any unnecessary watches/torches as a result of PH browsing and subsequently didn't need to borrow any more money the month after.
As with all services, it is not down to the provider, but the user, to ensure they are used sensibly and within their means.
I used it to purchase some flights that I needed to buy before payday, which was around 7-10 days away, and it was a useful service. I was willing to pay, and was aware of, the (comparatively) insane interest rates for the convenience and lack of other alternatives I had. The last time I used them was around a year ago. I've since been more sensible with finances, and now have other backups should I need them - and savings to boot.
When I used the service I could easily have spent all my money the next month and had to use them again to buy food - but I didn't. I pulled my belt in for a month, didn't buy any unnecessary watches/torches as a result of PH browsing and subsequently didn't need to borrow any more money the month after.
As with all services, it is not down to the provider, but the user, to ensure they are used sensibly and within their means.
menguin said:
I've used one of these companies two or three times before. I'm not hard up on cash, just have an abysmal credit rating due to past stupidity.
I used it to purchase some flights that I needed to buy before payday, which was around 7-10 days away, and it was a useful service. I was willing to pay, and was aware of, the (comparatively) insane interest rates for the convenience and lack of other alternatives I had. The last time I used them was around a year ago. I've since been more sensible with finances, and now have other backups should I need them - and savings to boot.
When I used the service I could easily have spent all my money the next month and had to use them again to buy food - but I didn't. I pulled my belt in for a month, didn't buy any unnecessary watches/torches as a result of PH browsing and subsequently didn't need to borrow any more money the month after.
As with all services, it is not down to the provider, but the user, to ensure they are used sensibly and within their means.
Some common sense at last. Thread ends.I used it to purchase some flights that I needed to buy before payday, which was around 7-10 days away, and it was a useful service. I was willing to pay, and was aware of, the (comparatively) insane interest rates for the convenience and lack of other alternatives I had. The last time I used them was around a year ago. I've since been more sensible with finances, and now have other backups should I need them - and savings to boot.
When I used the service I could easily have spent all my money the next month and had to use them again to buy food - but I didn't. I pulled my belt in for a month, didn't buy any unnecessary watches/torches as a result of PH browsing and subsequently didn't need to borrow any more money the month after.
As with all services, it is not down to the provider, but the user, to ensure they are used sensibly and within their means.
Soovy said:
menguin said:
I've used one of these companies two or three times before. I'm not hard up on cash, just have an abysmal credit rating due to past stupidity.
I used it to purchase some flights that I needed to buy before payday, which was around 7-10 days away, and it was a useful service. I was willing to pay, and was aware of, the (comparatively) insane interest rates for the convenience and lack of other alternatives I had. The last time I used them was around a year ago. I've since been more sensible with finances, and now have other backups should I need them - and savings to boot.
When I used the service I could easily have spent all my money the next month and had to use them again to buy food - but I didn't. I pulled my belt in for a month, didn't buy any unnecessary watches/torches as a result of PH browsing and subsequently didn't need to borrow any more money the month after.
As with all services, it is not down to the provider, but the user, to ensure they are used sensibly and within their means.
Some common sense at last. Thread ends.I used it to purchase some flights that I needed to buy before payday, which was around 7-10 days away, and it was a useful service. I was willing to pay, and was aware of, the (comparatively) insane interest rates for the convenience and lack of other alternatives I had. The last time I used them was around a year ago. I've since been more sensible with finances, and now have other backups should I need them - and savings to boot.
When I used the service I could easily have spent all my money the next month and had to use them again to buy food - but I didn't. I pulled my belt in for a month, didn't buy any unnecessary watches/torches as a result of PH browsing and subsequently didn't need to borrow any more money the month after.
As with all services, it is not down to the provider, but the user, to ensure they are used sensibly and within their means.
Does it enable you to guarantee a positive return if a new client only does one trade, then leaves?
Does this mean it is good business practice to ensure a client keeps coming back?
How do you ensure as many clients as possible repeat deal?
What stops you from going too far in this action?
DonkeyApple said:
Soovy said:
menguin said:
I've used one of these companies two or three times before. I'm not hard up on cash, just have an abysmal credit rating due to past stupidity.
I used it to purchase some flights that I needed to buy before payday, which was around 7-10 days away, and it was a useful service. I was willing to pay, and was aware of, the (comparatively) insane interest rates for the convenience and lack of other alternatives I had. The last time I used them was around a year ago. I've since been more sensible with finances, and now have other backups should I need them - and savings to boot.
When I used the service I could easily have spent all my money the next month and had to use them again to buy food - but I didn't. I pulled my belt in for a month, didn't buy any unnecessary watches/torches as a result of PH browsing and subsequently didn't need to borrow any more money the month after.
As with all services, it is not down to the provider, but the user, to ensure they are used sensibly and within their means.
Some common sense at last. Thread ends.I used it to purchase some flights that I needed to buy before payday, which was around 7-10 days away, and it was a useful service. I was willing to pay, and was aware of, the (comparatively) insane interest rates for the convenience and lack of other alternatives I had. The last time I used them was around a year ago. I've since been more sensible with finances, and now have other backups should I need them - and savings to boot.
When I used the service I could easily have spent all my money the next month and had to use them again to buy food - but I didn't. I pulled my belt in for a month, didn't buy any unnecessary watches/torches as a result of PH browsing and subsequently didn't need to borrow any more money the month after.
As with all services, it is not down to the provider, but the user, to ensure they are used sensibly and within their means.
Does it enable you to guarantee a positive return if a new client only does one trade, then leaves?
Does this mean it is good business practice to ensure a client keeps coming back?
How do you ensure as many clients as possible repeat deal?
What stops you from going too far in this action?
If a client joined and did one trade and then left, undoubtedly we would not go anywhere near making enough of a commission to cover the "average recuruitment cost per new customer" figure.
I can see both sides of this.
I'm all for self discipline and accountability but this should work on both sides. You simply cannot dangle irresistible carrots in front of people and then wash your hands because someone has taken the bait.
Business is largely about the manipulation of human psychology to either dupe, coerce or entice people to part with their cash and the financial market is no different.
Yes we are accountable for our actions but it takes two to have an affair (so to speak).
I'm all for self discipline and accountability but this should work on both sides. You simply cannot dangle irresistible carrots in front of people and then wash your hands because someone has taken the bait.
Business is largely about the manipulation of human psychology to either dupe, coerce or entice people to part with their cash and the financial market is no different.
Yes we are accountable for our actions but it takes two to have an affair (so to speak).
I know that isn't possible.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff