Payday lenders - any sympathy?

[OwlHoot]

Someone I know bought something from a large mail order company on a "no interest for a year" scheme. If he paid the full £200 by a certain date he would pay no interest; but failing that there would be over £200 extra interest to pay.

Last month, with a week to go before the deadline, he paid in full over the phone, or so he was was told. But the next day, on phoning his bank about something else, he found out by chance they had _not_ taken the full payment!

I won't mention the company's name, in case it was a genuine mistake. But I wouldn't be surprised if their phone operators have been told to do this all the time, to avoid customers dodging interest charges.

The corollary is if something similar applies to you then it's worth double-checking with the bank that the expected payment has been taken in full.

[VectraMan]

The only reason I can think to have any sympathy is there can't be many people who actually pay the APR. The vast majority must either they pay back the loans on time, or be in so much tulipe that the loan company has no hope of ever recovering the money. Either way, they earn nothing.

Generally I'm against the idea of the government interfering in the free market, and the "victims" are supposedly responsible adults don't forget. But realistically, a maximum legal APR might not be a terrible idea. I just wouldn't set it too low. If it were 200%, then that would still be way above what the legitimate banks and credit companies charge, but way below what these pay day lenders get away with. Maybe that'd encourage a middle way: lenders who would lend to people turned down by the banks, but without the social cost of causing financial ruin to anyone who misses a payment.

[vetran]

Because to some people £100 is a meal out, to others it is the choice between heating and eating, and a logal cap at 30% will move more people to illegal sources of funds

credit unions are capped, they seem to be doing ok.

it needs some restraint, they are advertising constantly on prime time tv which suggests they are making massive profits.

[BrilloPad]

credit unions are capped, they seem to be doing ok.

it needs some restraint, they are advertising constantly on prime time tv which suggests they are making massive profits.

I noticed that credit unions charge £10 to borrow £100 for a month - payday lenders charge £30.

What is the difference in APR?

Any mafematicians around?

[TheFaQQer]

I don't think they are after sympathy, are they?

[BoredBloke]

Bright House?

I walked past one of these plases on Sunday. They had a 42inch LCD tv by Baird on sale for over £500 - already over the odds and way more expensive than the likes of Richer Sounds etc. To do it on their finance was over £1400 in total. That is a shocking credit charge.

[amcdonald]

I walked past one of these plases on Sunday. They had a 42inch LCD tv by Baird on sale for over £500 - already over the odds and way more expensive than the likes of Richer Sounds etc. To do it on their finance was over £1400 in total. That is a shocking credit charge.

True, but most people will only see the monthly payment and as that looks affordable won't question the longterm cost of the product

They're not exactly marketing to the more intelligent members of society after all

[Old Greg]

Because they need fags and alcohol now!!!

Preying on financial unstable people isn't a new phenomenon though. There used to be a shop in Birmingham that allowed low income or credit unworthy people buy electrical appliances many years ago. Small shop front with a load of items in an a huge back office of lawyers/financial bods chasing the debts that were inevitable racked up. Was just a front to get people in to debt and then hammer them with interest and penalties.

Mind you, anyone buying from a shop above a kebab joint should take a little more care.

[BoredBloke]

True, but most people will only see the monthly payment and as that looks affordable won't question the longterm cost of the product

They're not exactly marketing to the more intelligent members of society after all

I appreciate that...I just think its taking the piss a lot!! I mean Baird are hardly up there with the best TV's yet this is over £500 for cash. My @rse. I spent £350 and got a 42 inch 1080p LCD tv from Richer Sounds. So they massivley markup the cash price and then add a huge apr to the finance.

[sasguru]

FFS let adults make decisions as they think fit. Fooking nanny state.