Pay day loans BBC News

gulliverfoylegulliverfoyle Posts: 6,318
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just watching BBC News and they have a piece on Pay day loans

The bloke who took out numerous of these loans and was bitching about the fact that they were phoning him about the loan
they just want THEIR money back its not a gift
now his house is being repossessed

I'm sorry but these people get my goat trying to blame the companies as its "too easy" to get them

sorry buddy its YOUR fault no one makes you take them out

the extortionate interest rate is clearly stated 1700%

if you cant afford it DONT

and BBC trying to imply that the loan is making him lose is house is misleading the are UNSECURED
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Comments

  • crazychris12crazychris12 Posts: 26,254
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    Well said. People shoould take more responsibility for their own actions and stop blaming everyone else.
  • BizBiz Posts: 14,756
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    .........and BBC trying to imply that the loan is making him lose is house is misleading the are UNSECURED

    No they didn't. They said he had defaulted on his mortgage payments.

    No he shouldn't have taken out these loans, but he found himself in an unenviable position - it has to be everyone's nightmare.

    I'm relieved it never happened to me - but it could happen to anyone (unless their family has enough money to help them out).
  • flagpoleflagpole Posts: 44,641
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    whilst i agree that people are responsible for their own actions lenders have to take some responsibility for their actions too.

    as much as you might say he shouldn't have borrowed the money if he couldn't pay it back what did he expect? you could equally say to the lender you shouldn't have leant the money to someone who couldn't pay it back what did you expect?

    people using these services are often in impossible situations. to blame the borrower completely is just like like blaming the victims of loans sharks.

    IMHO there should be a limit on the number of 'pay day' loans you can take, say four a year. because otherwise, if you are rolling them, they are just very expensive regular loans.
  • iannaiiannai Posts: 4,937
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    To be fair he only did what the Government have been doing for years - borrowing more than he can afford to pay back. Leading by example?

    Still at least he hasn't got to 3 trillion dollars before realising....
  • CitySlickerCitySlicker Posts: 10,414
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    I can see this issue from both sides. I think people absolutely must live within their means, I have always done this and never relied on loans. I might not have had the latest whatever it was or lived a luxurious social life but I have always lived within my means.

    On the other hand the payday loan companies know they have a pretty captive market, the people they are lending to are likely to be applying when they are desperate, plus financial education in the UK is shocking.

    I never bothered subscribing to music channels on Sky but I recently had them included in the subscription. It is no coincidence whenever I watch one of these channels - particularly MTV - I am likely to see a payday loan advert (usually Wonga). Yet when I watch Sky News or Discovery I am not sure if I have even seen an advert on there for payday loans. Of course they are targeting their demographic, that doesn't make it ethical. Remember when Domino's were told they can no longer sponsor The Simpsons because of childhood obesity?
  • [Deleted User][Deleted User] Posts: 14,589
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    iannai wrote: »
    To be fair he only did what the Government have been doing for years - borrowing more than he can afford to pay back. Leading by example?

    Still at least he hasn't got to 3 trillion dollars before realising....

    http://www.usdebtclock.org/
  • skunkboy69skunkboy69 Posts: 9,506
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    I know a lot of workmates who use this service and have managed to avoid all the horror stories.As long as it's paid back on the day agreed the fee's aren't really that bad.Yes,the API figures are extortionate but they only come into effect if you default for whatever reason.
  • [Deleted User][Deleted User] Posts: 14,589
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    just watching BBC News and they have a piece on Pay day loans

    The bloke who took out numerous of these loans and was bitching about the fact that they were phoning him about the loan
    they just want THEIR money back its not a gift
    now his house is being repossessed

    I'm sorry but these people get my goat trying to blame the companies as its "too easy" to get them

    sorry buddy its YOUR fault no one makes you take them out

    the extortionate interest rate is clearly stated 1700%

    if you cant afford it DONT

    and BBC trying to imply that the loan is making him lose is house is misleading the are UNSECURED

    I have a friend who did the same thing, he borrowed £150 for a week to pay a bill and in the end of the month he owed thousands and the amount was going up virtually hundreds of pounds everyday because the interest accumulated everyday. In the end the bailiffs came and took what he had which wasn't much and he declared himself bankrupt.
    Living in a council flat he went to the council and he ended up better off with more benefits.
  • tghe-retfordtghe-retford Posts: 26,449
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    iannai wrote: »
    To be fair he only did what the Government have been doing for years - borrowing more than he can afford to pay back. Leading by example?
    He's only doing what the Government has been asking everyone to do through their rhetoric and measures taken on interest rates - take on debt, don't save and spend, spend, spend our way to recovery!
  • solarflaresolarflare Posts: 22,297
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    iannai wrote: »
    To be fair he only did what the Government have been doing for years - borrowing more than he can afford to pay back. Leading by example?

    Still at least he hasn't got to 3 trillion dollars before realising....

    No but with that APR just give it another few weeks...!
  • Bom Diddly WoBom Diddly Wo Posts: 14,094
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    just watching BBC News and they have a piece on Pay day loans

    The bloke who took out numerous of these loans and was bitching about the fact that they were phoning him about the loan
    they just want THEIR money back its not a gift
    now his house is being repossessed

    I'm sorry but these people get my goat trying to blame the companies as its "too easy" to get them

    sorry buddy its YOUR fault no one makes you take them out

    the extortionate interest rate is clearly stated 1700%

    if you cant afford it DONT

    and BBC trying to imply that the loan is making him lose is house is misleading the are UNSECURED

    I completely disagree with you. I think pay day loans should be made illegal. There is no circumstance in which taking one out can benefit anyone. One is much better off owing a utility company money than taking out one of these loans at the ridiculous and scandalous interest they charge.
    They offer no real help to anybody and exist solely to take money off people who are desperate and obviously not very wise about such matters and they portray themselves as offering a facility that is useful and more desirable than what can only ever be a few pounds worth of debt for a few days. This few pounds soon rockets if they dont pay it back straight away at an already greatly increased amount.

    If they are finding that people are not paying them back then they have no cause to complain or be surprised as they all but con people into taking them out in the first place. I think everybody should get a payday loan and refuse to pay it back to teach these bloodsuckers a lesson.

    In a time when people are scared about their finances and the future and when people have little enough money anyway these companies are an obcenity and need outlawing immideaitely. They are no better than thugs who offer out loans to people on pain of, well pain.

    Yes I know that nobody forces anyone to have one of these loans and all the rest of it but not everybody is clued up about financial matters and see these loans as a way of avoiding debt to a utility company or such like, little realising that any utility company or reputable finance company will have far easier terms of repayment than these people offer.

    Good if people don't pay them back and good if enough people do it to send these vampires to the wall.
  • Bom Diddly WoBom Diddly Wo Posts: 14,094
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    Well said. People shoould take more responsibility for their own actions and stop blaming everyone else.

    These companies set people up to get into difficulties repaying so that they can reap the benefits of their gargantuan four figure interest rates. Stuff em and the horse they rode in on.
  • Bom Diddly WoBom Diddly Wo Posts: 14,094
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    skunkboy69 wrote: »
    I know a lot of workmates who use this service and have managed to avoid all the horror stories.As long as it's paid back on the day agreed the fee's aren't really that bad.Yes,the API figures are extortionate but they only come into effect if you default for whatever reason.

    You still pay back a lot more than is justifyable or ethical and for people unfortunate enough to feel that they need one of these loans it is a lot of money to be spending just to get a few quid to tide them over.
  • CitySlickerCitySlicker Posts: 10,414
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    I think pay day loans should be made illegal. There is no circumstance in which taking one out can benefit anyone. One is much better off owing a utility company money than taking out one of these loans at the ridiculous and scandalous interest they charge.

    I can still see a place for them, however it must be far more tightly regulated. I'll give you an example. Each month I work out what money I can afford to put into a savings account. There is a penalty on the savings account if I withdraw from it. If I miscalculated and put too much into the savings account, it would be cheaper for me to get a payday loan until I next get paid than to draw money out to cover my shortfall.

    Equally these payday lenders should not be preying on those who are on benefits. These are the people who can least afford the payments and most likely to get into trouble. This is where payday lending must be tightened and regulated, and if I'm quite honest if a person cannot prove they are in employment I don't think payday lending should happen when benefits are involved.

    At the root of all of this I firmly believe is financial education. I have only just got around to signing this e-petition, but Martin Lewis is calling for financial education to be compulsory in schools. Here is the petition for anyone who wishes to sign it: http://epetitions.direct.gov.uk/petitions/8903

    If we tie a noose around demand for these companies - i.e. we educate people about how to handle money - we kill them off when there is no demand.
  • yorkiegalyorkiegal Posts: 18,929
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    I've used them a few times after I had a lot of extra travel expenses when my dad was sick. It was going to be just once but tbh it's so tempting to carry on and you end up having to loan just to make it to what would have been your normal pay day, or in my case, benefit day. So I don't use them anymore. For a very short term loan just for a few days it cost me £10 to lend £100 which is a high rate but was worth it to me as it would have cost me more in bounced direct debits. If you start loaning it for a few weeks the interest adds up very quickly. However, it's very easy to get the money and you arrange at the time for them to automatically take it out of your account on the day you get paid. The problems arise if you don't pay them back on time I would imagine.
  • Bom Diddly WoBom Diddly Wo Posts: 14,094
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    There should definitely be more regulation. They should have to prove to an independant body that they offer a service that is both useful and not exploitative. People are more often than not better off negotiating with their original creditor than going to a third party for a solution especially when the third party has a vested interest in you defaulting.

    There should also be an upper limit on the amount they can expect to be paid back otherwise they are just being alowed to print money for themselves.
  • flagpoleflagpole Posts: 44,641
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    i don't think they should be banned. if an adult wants to borrow money to go out for a drink, buy a present or whatever, they should have that freedom. you just need to protect the vulnerable.

    like i said personally i would limit it to like 4 times a year. the real trap is when you are paying of last months load with this months wages and need another loan to cover the difference.
  • CitySlickerCitySlicker Posts: 10,414
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    I can't see how you can stop the number of times a person can be awarded a payday loan.

    I think it would be far better to put absolute percentage limits on borrowing - say if you borrowed £100 the overall repayment is capped at say £500 for the remaining lifetime of that debt. Even then, yes £500 would be a huge amount of the original loan but a cap at that level is still better than the thousands of pounds of debt that is allowed to build now.
  • flagpoleflagpole Posts: 44,641
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    I can't see how you can stop the number of times a person can be awarded a payday loan.

    I think it would be far better to put absolute percentage limits on borrowing - say if you borrowed £100 the overall repayment is capped at say £500 for the remaining lifetime of that debt. Even then, yes £500 would be a huge amount of the original loan but a cap at that level is still better than the thousands of pounds of debt that is allowed to build now.

    well it wouldn't be too hard to do. all the payday load dudes would have to agree to a scheme and you'd have to register to take one out.

    a cap of some kind either the number of times or the total amount as a percentage of you income. but the thing that i think needs avoiding is that people pay off one load with another. and the industry encourages this.
  • CitySlickerCitySlicker Posts: 10,414
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    flagpole wrote: »
    well it wouldn't be hard to do. all the payday load dudes would have to agree to a scheme and you'd have to register to take one out.

    I believe the contrary, it would actually be incredibly hard to do. Who administrates the scheme? Who pays for the staff at the scheme, what computer systems are used to maintain the scheme? What penalties will exist for companies who flout the number of loans either on purpose or by mistake?

    My suggestion of absolute maximum caps would make companies far more likely to investigate the affordability of loans plus they would also be a lot more careful who they lend to - the courts are usually only utilised once a person gets in an amount of debt that makes court action worthwhile to the company.
  • [Deleted User][Deleted User] Posts: 1,511
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    He's only doing what the Government has been asking everyone to do through their rhetoric and measures taken on interest rates - take on debt, don't save and spend, spend, spend our way to recovery!
    Which government would that be? The one whose leader was criticised earlier this week for almost telling people to pay off their credit cards and stop spending? ;)
  • [Deleted User][Deleted User] Posts: 4,218
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    Brighthouse are a another one!
  • CitySlickerCitySlicker Posts: 10,414
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    eng123 wrote: »
    Brighthouse are a another one!

    Oh yes Brighthouse, I had forgotten about them. How do you regulate Brighthouse though?
  • Bom Diddly WoBom Diddly Wo Posts: 14,094
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    I still think that the sharp practice and reprehensible tactics used should be made illegal and that a payday loan should perhaps incur a set fee limited to a certain percentage of the loan and after that just the regular interest rates that anyone has to pay on a normal loan,
  • jkwellyjkwelly Posts: 776
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    slyfox51 wrote: »

    Borrow £100 and make no repayments,

    After 7 years Owe £23,500,000,000,000 (£23.5 trillion)
    In other words, in less than six years you’d owe more than the entire US national debt.
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