I used to work for a payday loan company (fully expected to be called all sorts now, but it paid a wage to keep a roof over my head and put food in my childrens bellies!). They charge £25 per £100 borrowed, reading the BBC quote that was posted further up the thread (sorry phone will not let me quote it for some reason) the maximum that they will be able to charge is £24, not really a big difference, the company I worked for would only lose £1 per £100 borrowed.
It was very interesting the types of customers we spoke with. You would have genuine cases, peoples ovens that had blown up, car has failed MOT etc who who were using the service as a one off and they often asked lots of questions on how it worked, exactly what they would pay back etc. You would then get the ones who were ringing because they wanted to go out, get the shoes they have just seen etc, they generally didn't care, just wanted the money there and then. With all customers you have to read a legal statement outlining how much they were borrowing, how much they have to repay and the representative APR among other things, 9 times out of 10 they used to get quite annoyed and talk over you saying things such as "yeah, yeah, yeah heard it all before" "just give me my money, I don't need to hear this". Occasionally we would have to request bank statements from customers, sometimes they would make for interesting reading 7,8,9+ payday loans, lots of different betting shops these customers would be declined, usually they didn't take the news well.
I worked there for 2yrs admittedly 9mths on maternity leave, it was a real eye opener!
Whatever the rights or wrongs of the new regulations, the Payday Loan Companies are going to have to live with it and adapt their business plan accordingly, and of course if Labour are returned to power next year they have promised even tougher regulations then those announced today.
A lot of the rates look extortionate because they are legally obliged to show the yearly interest rate. If you are only having the loan for a few days or a couple of weeks and pay back on time then you pay nowhere near that amount.
The issue with payday loans IMO is the lack of responsible lending, not the interest rates.
Where does the responsibility lie though?
If you ran a casino or a bookies and a guy was coming in every day having a gamble and it became clear that he was gambling more than he could afford and was getting further and further into debt by gambling; do you think that you should be forced to cap it and have a limit imposed on you for how much you're allowed to let people gamble just because some customers can't control their money?
As you say, if people pay off their loans early or on time then there isn't a huge issue. The problem is lending to people who clearly have bad debt and a history of defaulting and falling short on the repayments. Rather like a casino they prey on people who are stupid with their money and if you're daft enough then they wont stop you from getting into trouble.
It's up to the customer to control their own spending. Nobody forces them to use these loan companies.
I used to work for a payday loan company (fully expected to be called all sorts now, but it paid a wage to keep a roof over my head and put food in my childrens bellies!). They charge £25 per £100 borrowed, reading the BBC quote that was posted further up the thread (sorry phone will not let me quote it for some reason) the maximum that they will be able to charge is £24, not really a big difference, the company I worked for would only lose £1 per £100 borrowed.
It was very interesting the types of customers we spoke with. You would have genuine cases, peoples ovens that had blown up, car has failed MOT etc who who were using the service as a one off and they often asked lots of questions on how it worked, exactly what they would pay back etc. You would then get the ones who were ringing because they wanted to go out, get the shoes they have just seen etc, they generally didn't care, just wanted the money there and then. With all customers you have to read a legal statement outlining how much they were borrowing, how much they have to repay and the representative APR among other things, 9 times out of 10 they used to get quite annoyed and talk over you saying things such as "yeah, yeah, yeah heard it all before" "just give me my money, I don't need to hear this". Occasionally we would have to request bank statements from customers, sometimes they would make for interesting reading 7,8,9+ payday loans, lots of different betting shops these customers would be declined, usually they didn't take the news well.
I worked there for 2yrs admittedly 9mths on maternity leave, it was a real eye opener!
I used to work for a payday loan company (fully expected to be called all sorts now, but it paid a wage to keep a roof over my head and put food in my childrens bellies!). They charge £25 per £100 borrowed, reading the BBC quote that was posted further up the thread (sorry phone will not let me quote it for some reason) the maximum that they will be able to charge is £24, not really a big difference, the company I worked for would only lose £1 per £100 borrowed.
It was very interesting the types of customers we spoke with. You would have genuine cases, peoples ovens that had blown up, car has failed MOT etc who who were using the service as a one off and they often asked lots of questions on how it worked, exactly what they would pay back etc. You would then get the ones who were ringing because they wanted to go out, get the shoes they have just seen etc, they generally didn't care, just wanted the money there and then. With all customers you have to read a legal statement outlining how much they were borrowing, how much they have to repay and the representative APR among other things, 9 times out of 10 they used to get quite annoyed and talk over you saying things such as "yeah, yeah, yeah heard it all before" "just give me my money, I don't need to hear this". Occasionally we would have to request bank statements from customers, sometimes they would make for interesting reading 7,8,9+ payday loans, lots of different betting shops these customers would be declined, usually they didn't take the news well.
I worked there for 2yrs admittedly 9mths on maternity leave, it was a real eye opener!
Interesting to read, thanks.
I work in finance, all be it at the opposite end of the spectrum dealing with high net worth individuals and corporates. But it's the same thing really. We are legally obliged to explain the risks to investors and, 9 times out of 10, they just go 'yeah, yeah, whatever, can you just place my money. It shows in some respects that the majority of people, rich or poor, don't really seem to have a clue about money and seem to care even less
I used to work for a payday loan company (fully expected to be called all sorts now, but it paid a wage to keep a roof over my head and put food in my childrens bellies!). They charge £25 per £100 borrowed, reading the BBC quote that was posted further up the thread (sorry phone will not let me quote it for some reason) the maximum that they will be able to charge is £24, not really a big difference, the company I worked for would only lose £1 per £100 borrowed.
It was very interesting the types of customers we spoke with. You would have genuine cases, peoples ovens that had blown up, car has failed MOT etc who who were using the service as a one off and they often asked lots of questions on how it worked, exactly what they would pay back etc. You would then get the ones who were ringing because they wanted to go out, get the shoes they have just seen etc, they generally didn't care, just wanted the money there and then. With all customers you have to read a legal statement outlining how much they were borrowing, how much they have to repay and the representative APR among other things, 9 times out of 10 they used to get quite annoyed and talk over you saying things such as "yeah, yeah, yeah heard it all before" "just give me my money, I don't need to hear this". Occasionally we would have to request bank statements from customers, sometimes they would make for interesting reading 7,8,9+ payday loans, lots of different betting shops these customers would be declined, usually they didn't take the news well.
I worked there for 2yrs admittedly 9mths on maternity leave, it was a real eye opener!
Good post. Can I please just ask you, how do you know that if someone says they want money for a new car or because their oven has blown up that this is what they will definitely spend it on? Surely once the money hits their account you can't control or monitor what they use it for.
I mean. If they wanted it so they could gamble it on some horse at the 2:30 at Aintree, a bottle of whisky and 200 Benson & Hedges they're not gonna admit to that surely. So how do you know who's genuine? Maybe that car that broke down turned into a Caribbean cruise.
I used to work for a payday loan company (fully expected to be called all sorts now, but it paid a wage to keep a roof over my head and put food in my childrens bellies!). They charge £25 per £100 borrowed, reading the BBC quote that was posted further up the thread (sorry phone will not let me quote it for some reason) the maximum that they will be able to charge is £24, not really a big difference, the company I worked for would only lose £1 per £100 borrowed.
It was very interesting the types of customers we spoke with. You would have genuine cases, peoples ovens that had blown up, car has failed MOT etc who who were using the service as a one off and they often asked lots of questions on how it worked, exactly what they would pay back etc. You would then get the ones who were ringing because they wanted to go out, get the shoes they have just seen etc, they generally didn't care, just wanted the money there and then. With all customers you have to read a legal statement outlining how much they were borrowing, how much they have to repay and the representative APR among other things, 9 times out of 10 they used to get quite annoyed and talk over you saying things such as "yeah, yeah, yeah heard it all before" "just give me my money, I don't need to hear this". Occasionally we would have to request bank statements from customers, sometimes they would make for interesting reading 7,8,9+ payday loans, lots of different betting shops these customers would be declined, usually they didn't take the news well.
I worked there for 2yrs admittedly 9mths on maternity leave, it was a real eye opener!
Very interesting - hopefully put a stop to the annoying brigade who like to insist the working poor are all virtuous, no Muslims are extremist etc. Disclaimer - obviously I don't think all poor people are unvirtuous, all Muslims are extremists etc - quite the opposite. There are a few on this forum who won't accept any examples to the contrary though, or pretend that those examples don't count.
A cap is the most sensible way forward I think. They're actually *almost* reasonable if you're only borrowing a small amount for a short amount of time and you can't get credit from the usual places. I used them a couple of times when I needed £100 to tide me over to pay day and ended up paying back something like £120. But the debt shouldn't be allowed to spiral upwards so much if you can't pay it back. Twice what you borrowed seems a fair cap.
Good post. Can I please just ask you, how do you know that if someone says they want money for a new car or because their oven has blown up that this is what they will definitely spend it on? Surely once the money hits their account you can't control or monitor what they use it for.
I mean. If they wanted it so they could gamble it on some horse at the 2:30 at Aintree, a bottle of whisky and 200 Benson & Hedges they're not gonna admit to that surely. So how do you know who's genuine? Maybe that car that broke down turned into a Caribbean cruise.
To be honest you don't, its up to them what they want to spend the money on. You could normally tell who was in a bit of a pickle by the way they were on the phone, normally they were quite upset. When you speak to a customer the calls are logged and the agent would write a brief outline of what was said, all calls were also recorded. You can see if they are a first time customer or a frequent customer. You can only go on what each customer says to you. I remember one customer who I opened an account for him, he said his oven had blown up, when I left he had said his oven had blown up 17 times one unlucky man!
We used to have people from all walks of life people on JSA or their only income was benefits we would decline the loan, that is if they were honest with us. If we had any doubts about an application we would request full documents, that would be passport/driving licence, utility bill and 3 months Bank statements. We also had people on £40/50/60k + applying for loans, I guess even people on large salaries (in some cases) can't manage their money. Interestingly we used to have a large number of the armed forces, mostly living in barracks having payday loans.
A cap is the most sensible way forward I think. They're actually *almost* reasonable if you're only borrowing a small amount for a short amount of time and you can't get credit from the usual places. I used them a couple of times when I needed £100 to tide me over to pay day and ended up paying back something like £120. But the debt shouldn't be allowed to spiral upwards so much if you can't pay it back. Twice what you borrowed seems a fair cap.
The problem with the cap is, someone could borrow say £500 and offer to pay off say £10 a week. They couldn't take me to court because I'm not actually defaulting on the loan. I could in theory keep paying them a tenner a week until it got to the £1000 cap. It would take 2 years to pay it all off and because of the cap I'd never have to pay any more than a thousand quid. I have just borrowed £500 over 2 years at a tenner a week and it's only cost me £250 a year in interest.
If you were a loan company how pissed off would you be that someone could hold on to your money for all that time and you couldn't legally pursue them for anything more than double what you lent them?
What are Sky going to do now that half their adverts will disappear overnight?
Sky don't make much from advertising. 8% of their TV revenue if I remember correctly. The loss from payday loans will hardly make any difference to them.
Good post. Can I please just ask you, how do you know that if someone says they want money for a new car or because their oven has blown up that this is what they will definitely spend it on? Surely once the money hits their account you can't control or monitor what they use it for.
I mean. If they wanted it so they could gamble it on some horse at the 2:30 at Aintree, a bottle of whisky and 200 Benson & Hedges they're not gonna admit to that surely. So how do you know who's genuine? Maybe that car that broke down turned into a Caribbean cruise.
You really are a case aren't you, can't you accept that there are other reasons for people getting loans other than for betting on horses and getting a pair of trainers.
The fact is that these companies rely on people not being able to pay back and then grabbing the interest as it builds up.
You may be all perfect and never had to resort to borrow anything but didn't you state that you were in an income support family? Maybe I should be as Irate as you as I'm paying for people on income support out of my taxes..he who throws the first stone and all that
That's not actually true for the payday loan company I worked for, the interest is fixed at £25 per £100 borrowed, if you default on the payment a £12 fee could be applied, if you paid within 14 days only the agreed amount would be taken. If you didn't pay within that period it would be passed to the collections department, they would contact the customer to arrange to collect payment. If this went on for ages the customer would be offered a settlement figure, usually the amount they borrowed and a % of the interest. The customers account would be frozen after the 14 days and we would not re-lend to them.
Yes we did offer deferrals to the customers, but under a change in the regulations we were not allowed to offer these to the customer verbally or via email/text.
All of the above is stated to the customer in the legal statement that is read to them when they apply for the loan.
*Obviously I can only speak for the company I worked for. In re industry there are several that are known to be awful, obviously I can't mention names!
Very interesting - hopefully put a stop to the annoying brigade who like to insist the working poor are all virtuous, no Muslims are extremist etc. Disclaimer - obviously I don't think all poor people are unvirtuous, all Muslims are extremists etc - quite the opposite. There are a few on this forum who won't accept any examples to the contrary though, or pretend that those examples don't count.
Errrm......where were 'the Muslims' in Luckyyems post?
Were they hiding somewhere or am i missing something?
Comments
It was very interesting the types of customers we spoke with. You would have genuine cases, peoples ovens that had blown up, car has failed MOT etc who who were using the service as a one off and they often asked lots of questions on how it worked, exactly what they would pay back etc. You would then get the ones who were ringing because they wanted to go out, get the shoes they have just seen etc, they generally didn't care, just wanted the money there and then. With all customers you have to read a legal statement outlining how much they were borrowing, how much they have to repay and the representative APR among other things, 9 times out of 10 they used to get quite annoyed and talk over you saying things such as "yeah, yeah, yeah heard it all before" "just give me my money, I don't need to hear this". Occasionally we would have to request bank statements from customers, sometimes they would make for interesting reading 7,8,9+ payday loans, lots of different betting shops these customers would be declined, usually they didn't take the news well.
I worked there for 2yrs admittedly 9mths on maternity leave, it was a real eye opener!
Where does the responsibility lie though?
If you ran a casino or a bookies and a guy was coming in every day having a gamble and it became clear that he was gambling more than he could afford and was getting further and further into debt by gambling; do you think that you should be forced to cap it and have a limit imposed on you for how much you're allowed to let people gamble just because some customers can't control their money?
As you say, if people pay off their loans early or on time then there isn't a huge issue. The problem is lending to people who clearly have bad debt and a history of defaulting and falling short on the repayments. Rather like a casino they prey on people who are stupid with their money and if you're daft enough then they wont stop you from getting into trouble.
It's up to the customer to control their own spending. Nobody forces them to use these loan companies.
Curse you and your actual relevant experience
Interesting to read, thanks.
I work in finance, all be it at the opposite end of the spectrum dealing with high net worth individuals and corporates. But it's the same thing really. We are legally obliged to explain the risks to investors and, 9 times out of 10, they just go 'yeah, yeah, whatever, can you just place my money. It shows in some respects that the majority of people, rich or poor, don't really seem to have a clue about money and seem to care even less
Good post. Can I please just ask you, how do you know that if someone says they want money for a new car or because their oven has blown up that this is what they will definitely spend it on? Surely once the money hits their account you can't control or monitor what they use it for.
I mean. If they wanted it so they could gamble it on some horse at the 2:30 at Aintree, a bottle of whisky and 200 Benson & Hedges they're not gonna admit to that surely. So how do you know who's genuine? Maybe that car that broke down turned into a Caribbean cruise.
Very interesting - hopefully put a stop to the annoying brigade who like to insist the working poor are all virtuous, no Muslims are extremist etc. Disclaimer - obviously I don't think all poor people are unvirtuous, all Muslims are extremists etc - quite the opposite. There are a few on this forum who won't accept any examples to the contrary though, or pretend that those examples don't count.
To be honest you don't, its up to them what they want to spend the money on. You could normally tell who was in a bit of a pickle by the way they were on the phone, normally they were quite upset. When you speak to a customer the calls are logged and the agent would write a brief outline of what was said, all calls were also recorded. You can see if they are a first time customer or a frequent customer. You can only go on what each customer says to you. I remember one customer who I opened an account for him, he said his oven had blown up, when I left he had said his oven had blown up 17 times one unlucky man!
We used to have people from all walks of life people on JSA or their only income was benefits we would decline the loan, that is if they were honest with us. If we had any doubts about an application we would request full documents, that would be passport/driving licence, utility bill and 3 months Bank statements. We also had people on £40/50/60k + applying for loans, I guess even people on large salaries (in some cases) can't manage their money. Interestingly we used to have a large number of the armed forces, mostly living in barracks having payday loans.
The problem with the cap is, someone could borrow say £500 and offer to pay off say £10 a week. They couldn't take me to court because I'm not actually defaulting on the loan. I could in theory keep paying them a tenner a week until it got to the £1000 cap. It would take 2 years to pay it all off and because of the cap I'd never have to pay any more than a thousand quid. I have just borrowed £500 over 2 years at a tenner a week and it's only cost me £250 a year in interest.
If you were a loan company how pissed off would you be that someone could hold on to your money for all that time and you couldn't legally pursue them for anything more than double what you lent them?
Sky don't make much from advertising. 8% of their TV revenue if I remember correctly. The loss from payday loans will hardly make any difference to them.
you sound like a Bond Villain.. are you sitting in a chair stroking a white cat.:D
You really are a case aren't you, can't you accept that there are other reasons for people getting loans other than for betting on horses and getting a pair of trainers.
The fact is that these companies rely on people not being able to pay back and then grabbing the interest as it builds up.
You may be all perfect and never had to resort to borrow anything but didn't you state that you were in an income support family? Maybe I should be as Irate as you as I'm paying for people on income support out of my taxes..he who throws the first stone and all that
Were they hiding somewhere or am i missing something?