# Beware - Loan Sharks



## adf27 (Mar 14, 2012)

Has anyone noticed the extortionate amounts online lenders charge for borrowing a small amount of money??


----------



## bigslippy (Sep 19, 2010)

Yep , ripoff


----------



## adf27 (Mar 14, 2012)

something like 1700% APR


----------



## M44T (Jun 9, 2011)

Safer to use credit card or overdraft, aslong as they are available to you obviously. but thats where these loan companies make there money, from people that dont have alot.

ps this is in the wrong room


----------



## pgarner528 (Aug 11, 2008)

Agreed, though to be fair in that example probably most of that is fees.

Personally, I think companies like this should not be allowed to exist. In the US, a lot of the states have usury laws which cap maximum interest rates. The UK used to have a usury law but it was repealed in 1854.


----------



## stealthwolf (Sep 24, 2008)

But that isn't truly representative. I went to the same website and the charges for borrowing £1 and £100 are pretty much the same - you pay around £6 extra. There will always be a minimum charge.


----------



## OldskoolRS (May 5, 2011)

While the APR is very high, the intention is that the loan is paid back in a short time, so the costs shouldn't be huge. I'd hope that they only get used for essential purchases like food (and detailing products ) rather than frivolous purchases.

Personally, having got into major debt when I was 20 (which meant I had to sell the car that caused the debt ) I have this old fashioned view thesedays that I don't buy anything I can't afford to pay for (apart from a modest mortgage). It means I've gone without things over the years, but at least I'm not at the mercy of these sharks...


----------



## DampDog (Apr 16, 2011)

IMO these sort of loans are criminal. They may be within the letter of the law but the rates they are allowed to get away with charging are extortionate.

They specifically target the people who are the most desperate, those that just need a few quid to simply get by to the next pay packet, those that are at the most risk of falling into serious debt. They really need to be legislated out of business as they're glorified loan sharks. If the goverment was really interested in people they'd set up community credit or credit unions so they could borrow the odd few quid once in a while for a very small return.

I'm old fashioned with old fashioned values. If I can't afford it I don't have it and have a very modest lifestyle compaired to most.


----------



## Darlofan (Nov 24, 2010)

Debt is never a problem if managed properly and most important understood. Sooner they start teaching about money and debt management in schools the better.


----------



## R7KY D (Feb 16, 2010)

Aimed at people who want to keep up with the christmas/birthday presents can't afford a PS3 for their son , Get one of these loans and end up paying for it for the next 5 years , It is disgraceful by the companies offering these services but on the other hand there are plenty of people who think that paying £1500 or whatever for a PS3 is okay just so they can see the smile on their childs face , I guess that's where the market is and they are supplying it , There must be plenty of people who choose to live like this , Or the person who gets paid on a Friday and skint by Saturday morning plenty of them too


----------



## Andrew125 (Apr 2, 2012)

I would urge anyone who finds themselves in serious debt to contact either their local Citizens Advice Beaurue (CAB) phone numbers in the Phone Book or Online or an organisation called CCC which I think stands for the Consumer Credit Counsel.

Both services are entirely free and will be able to advise you.

And yes the interest rates offered by the short term loan companies are astronomical. I have seen annual APR of over 3000% advertised from more than one. Terrifying.


----------



## The Cueball (Feb 8, 2007)

if idiots had more integrity then these sorts of companies wouldn't be in business... simple really...

:thumb:


----------



## DampDog (Apr 16, 2011)

Theres a difference between managing debt and taking advantage of those who are in debt.

Agreed they should teach more in schools though, Debt, money management, first aid, health. Instead of waisting time and money on teaching "citizenship" ffs.


----------



## DampDog (Apr 16, 2011)

The Cueball said:


> if idiots had more integrity then these sorts of companies wouldn't be in business... simple really...
> 
> :thumb:


I doubt these people know what the word "integrity" means..


----------



## Bill58 (Jul 5, 2010)

Both my daughters managed to secure loans at 0% interest.
They borrowed from me.


----------



## R7KY D (Feb 16, 2010)

Bill58 said:


> Both my daughters managed to secure loans at 0% interest.
> They borrowed from me.


Bank of DAD , The best bank in the world :thumb:


----------



## NickP (Nov 20, 2005)

who are the sharks?
http://www.bbc.co.uk/news/business-16002022


----------



## Bero (Mar 9, 2008)

woah woah waoh. Loan Sharks give you money and come back and brake your legs or threaten your children if you don't repay.

No one is forcing anyone to tale a loan; and all charges are 100% highlighted and clear upfront with no hidden extras. The above example is stupid - who's going to borrow £1 for 1day?! Even if you do the company need to run a credit and identity check on you and process the loan and transfer money to you outside normal transfer times, and even outwith business hours.....for this it looks like they charge £5.50 for all this, absolutely nothing in reality....nobody is getting rich processing something like this!

If you need £100 for a week and have nowhere else to turn I think the offer a very good service at a very reasonable rate.

People make much higher % profits selling you an iPhone, porche (did you see their profits?!) ......do you want them made illegal too? Banks make more money with £1000 of your money in the bank and paying you 0.1% interest......do you want saving accounts outlawed? Credit Cards may WAY more profit loaning £3000 at much much smaller APR (<20%) should they be outlawed?! Tell me what they should be charging for £1 for 1day? If you borrow £10 from a friend for a week then buy him a pint at the weekend as a thanks is that reasonable? This is the same as 6,000,000% interest! Borrow the £10 for a year at the same rate and you'll be owe him £60million by the end!

I treat the comments about we buy any car with the same contempt. It's a service available to you, if you don't want it don't use it....in the same way you don't use the VAST majority of services. I think Sly TV is the biggest ripoff in teh world, it costs them nothing to add you to their viewers but charge you circa £60 a month for the privilege....again much higher profit than making £5.56 after carrying out some work!


----------



## Andrew125 (Apr 2, 2012)

DampDog said:


> Theres a difference between managing debt and taking advantage of those who are in debt.
> 
> Agreed they should teach more in schools though, Debt, money management, first aid, health. Instead of waisting time and money on teaching "citizenship" ffs.


I have always felt that money management and basic book keeping should be taught in schools. Many people go on to be self employed and Book keeping/ Tax and VAT returns can be the very devil to manage. Accountants charge a small fortune just to file the returns and check things over but if god forbid they have to do the books as well the price goes through the roof.

People can find themselves in debt for allsorts of reasons, usually overspending or living beyond their means, but anyone of us could have a misfortune and find ourselves up against it. I count my blessings every day.


----------



## Bero (Mar 9, 2008)

NickP said:


> who are the sharks?
> http://www.bbc.co.uk/news/business-16002022


Good point, the bank of Scotland charge £1 a day if you go into your overdraft.....or £5 a day if you don't have an arranged overdraft. So taking it to the silly extremes of the OP if you go 1p into debt and are charged £5 for the day.......Make this rate into an APR and you would owe MORE than the US national dept (£15.6 Trillion) in under 7 days!

APR in not a good measure of the cost of short term loans!


----------



## Brazo (Oct 27, 2005)

Its not actually extortionate when you factor into the quick payback time, No one is going to lend you £200 at an apr of 7% because the lender will make about 37 pence! hardly worth the risk.

An APR of 3000% may seem high and it would be if over 5 years but on a payday loan (months pay back) it will be a much smaller charge.


----------



## DampDog (Apr 16, 2011)

Bero said:


> woah woah waoh. Loan Sharks give you money and come back and brake your legs or threaten your children if you don't repay.


What and you think these companies can't make someones life a misery without breaking their arms or legs?

Theres a world of difference between the banks and these companies. For one they target those who are most at risk. If you need to borrow £25,£50,£100 you're probaly struggling to get by. Probalby in a low paid job, which means probaly not well educated or in a position to way up all the numbers they throw at you. The other difference is the other companies offer a "service" Sky, we buy any car, etc. you don't have to watch TV or have a new car. You do need money to pay the bills.

As above head off to the CAB, before signing up with this type of setup. It's an idicator of the current climate, 2-3 years back there were few if any ad's for this type of comapny on the tele, now there of loads.


----------



## Andrew125 (Apr 2, 2012)

Brazo said:


> Its not actually extortionate when you factor into the quick payback time, No one is going to lend you £200 at an apr of 7% because the lender will make about 37 pence! hardly worth the risk.
> 
> An APR of 3000% may seem high and it would be if over 5 years but on a payday loan (months pay back) it will be a much smaller charge.


You are absolutely right, when a payday loan is used correctly then yes they seem fair enough, but when people get into trouble, miss payments for whatever reason then the problems can arise.

Not that I have ever had to use a company like these being discussed but I did have a situation years ago where someone owed me a lot of money and whose cheques kept bouncing..I had to pay out an awful lot of money to other people on the strength of the job for work they had done but the client didn't settle the accounts. Now say for example I had a payday loan and needed the money to pay back the loan company..I'd be in serious financial trouble very quickly.

A lender nor a Borrower be is the best advice and if you can manage it thats the best way forwards.


----------



## Bero (Mar 9, 2008)

DampDog said:


> What and you think these companies can't make someones life a misery without breaking their arms or legs?


There is many worlds of difference between threatening your children's safety while reminding you they know where you live and know the school you kids go to. And a company calling you 50 times a day and threatening to take you to court.



DampDog said:


> Theres a world of difference between the banks and these companies. For one they target those who are most at risk. If you need to borrow £25,£50,£100 you're probaly struggling to get by. Probalby in a low paid job, which means probaly not well educated or in a position to way up all the numbers they throw at you. The other difference is the other companies offer a "service" Sky, we buy any car, etc. you don't have to watch TV or have a new car. You do need money to pay the bills.
> 
> As above head off to the CAB, before signing up with this type of setup. It's an idicator of the current climate, 2-3 years back there were few if any ad's for this type of comapny on the tele, now there of loads.


All people loaning money target people who need money.....they'd be pretty silly not to! This is ture of £100 payday loans and multi-billion pound financial company acquisitions. There are regulations in place to make things clear....as shown by all companies publishing their APR (regardless of how irrelevant it is for short term loans) and the above example give a very simple and very clear indication of what you borrow, how long you borrow for and what it costs you, how could it possibly me made easier or clearer? Do we create a second class citizen who are less well educated and not allowed to make legal decisions? We could always include Jews, gays, coloured people in this class.......and rename the upperclass....oh i don't know....something like the Aryan Race?

People need to take responsibility for themselves, not 'well i never understood', 'i thought the company had my best interests at heart' bolx people trot out; it's not the law makers responsibility to do this.

Say you're a single mum with two babies and nowhere to turn to when your washing machine breaks, and you need £100 for a week.....where else in the world can you get this if you don't have a credit card? As i say, it's an option that's open to them....no one is forcing anything on anyone else - outlaw it and you only close doors. So they may end up selling their TV to cash convertors or something like that....and that WILL cost you a lot more as you can guarantee their offer will be rock bottom....should we outlaw them too? Then what are they going to do....offer hummers round the back of McDonalds? :doublesho :lol:


----------



## DampDog (Apr 16, 2011)

Bero said:


> ....should we outlaw them too?


Yup..

We seem to be slipping into a society that accepts people being ripped off and looks the other way. The "All's fair in business" attitude, which is why the country/world is up sh1te creek without a paddle at the moment.

You only have a choice until the moment you become desperate. After that it's academic. Plus just because people take responsibility for their actions doesn't necessarily mean they are in control. Life isn't that fair.

Ordinary people are really starting to struggle to get by at the moment. My view if people are working hard and come on hard times they deserve a little help. I'm not talking about the scroungers who sit at home all day milking the system.


----------



## Bero (Mar 9, 2008)

DampDog said:


> Yup..
> 
> We seem to be slipping into a society that accepts people being ripped off and looks the other way. The "All's fair in business" attitude, which is why the country/world is up sh1te creek without a paddle at the moment.
> 
> ...


So......you propose helping people by limiting their options and outlawing services that could, potentially, in the right circumstances be VERY beneficial?

What about Dragons Den? They take a big % of things for marginal risks - for the chop too?


----------



## Andrew125 (Apr 2, 2012)

I think the thing is that anyone of us for whatever reason could find ourselves in a bad financial situation, however much we try to safeguard ourselves. A messy divorce, bad clients not paying or going bankcrupt before settling their accounts (I've had that one done to me on one occaision). A whole host of things can take the ordinary hard working person and drag them into a money pit.

Responsible actions are the duty of everyone, some are better than others at dealing with situations when things go wrong others aren't. For example I am dyslexic and dyspraxic and struggle with numbers, it may as well be written in Urdu for all it means to me so I really have to sit down and break things down, sometimes line by line, I add, subtract, divide and try to conquer the sums in front of me but sometimes have to get my sister who is a book keeper to help me. I know I have a problem so I make myself doubly sure that everything is in order but that's just me. I wouldn't sleep nights if I had financial worries so I do my best to stay on top of things.

Sadly not everyone can cope, not everyone has the necessary tools to sit down and work things through, fear kicks in and they bury their heads in the sand. So what the answer to that is I have no idea. Recent government reports illustrate that literacy and numeracy standards are falling at an alraming rate. I know several children who don't read well and who's level in Maths is very poor yet the schools expect them to go out into the world and cope whilst hardly being able to read and write or do basic adding and subtraction. A lot of this could stem from lack of support at home, helping with homework, reading, projects etc but it seems endemic of the state of the country and may well be why we have a large group of people who could be described as unemployable. How many people here, particularly the self employed gasp in horror at the inepitude of the young or those working in shops/suppliers etc etc, it's really quite worrying.

Responsible borrowing if you must is one thing but there should be responsible lending as well. I don't know what safeguards there are in place to protect people from themselves..as already pointed out no one is forcing these people to take out these loans but in desperate times people do the daftest things.

Spend wisely, spend carefully, see what you can use around you without going shopping either online or on the high street. 

Save the pennies, they really do add up. You be amazed at what I have bought over the years using my loose change jar, in fact I must go and have a count up.


----------



## DampDog (Apr 16, 2011)

Bero said:


> So......you propose 'helping' people limiting their options and outlawing services that could, potentially, in the right circumstances be VERY beneficial?


What you're saying is "joe bloggs" goes to cash converters and sell his beloved guitar to them for £40 and they then sell it for £150 they are doing him a service. In your case he's £40 better off.

My view is his guitar is worth £150 so they are ripping him off for £110. You can wrap it up in offering a service or business acumen. But what these companies are actually doing is taking advantage of the situation. ( not in all cases)


----------



## Andrew125 (Apr 2, 2012)

DampDog said:


> What you're saying is "joe bloggs" goes to cash converters and sell his beloved guitar to them for £40 and they then sell it for £150 they are doing him a service. In your case he's £40 better off.
> 
> My view is his guitar is worth £150 so they are ripping him off for £110. You can wrap it up in offering a service or business acumen. But what these companies are actually doing is taking advantage of the situation. ( not in all cases)


Whilst I hear what you say, the company you mention has to pay it's staff wages and it's overheads which in any town centre aren't going to be cheap. So whilst it may seem they are conning the poor man out of £110, they have to be profitable or there is no point in being in business.

I do sympathise with anyone who has to sell their personal items but if they want what something is actually worth, they could sell it privately and try to get a better figure. There are Free ads, and other ways of selling things, it all depends on the individual circumstance and a little future planning.


----------



## DampDog (Apr 16, 2011)

Andrew125 said:


> I do sympathise with anyone who has to sell their personal items but if they want what something is actually worth, they could sell it privately and try to get a better figure. There are Free ads, and other ways of selling things, it all depends on the individual circumstance and a little future planning.


Same here, some people have it tough for no good reason. Others are out of control and bring it on themselves. But I still hold the view these types of companies have only appeared in numbers over the past few years and "target" for want of a better word the most disadvantaged amongst us. If you have a some odds n sods lying around the house you want shut of and can get a few quid for fair enough you know the score. But if you're strapped for enough income to pay the bills it's not so nice a picture.


----------



## Bero (Mar 9, 2008)

DampDog said:


> What you're saying is "joe bloggs" goes to cash converters and sell his beloved guitar to them for £40 and they then sell it for £150 they are doing him a service. In your case he's £40 better off.
> 
> My view is his guitar is worth £150 so they are ripping him off for £110. You can wrap it up in offering a service or business acumen. But what these companies are actually doing is taking advantage of the situation. ( not in all cases)


Yes, he's £40 better off! They don't hold a gun to your head, there is no obligation to accept an offer. If you need £40 in the next hour to release a wheel clamp or your car gets towed and you owe £250 + £20 a day then it's a no brainier to sell it to them!

If you want to maximize your return do all the donkey work your self..and you still probably wont get £150; list it on ebay (risk being ripped off and pay the fees) or gumtree and pay to take out adds in the local paper, have people round your house to look at it etc.

Any company you can walk into and walk out with cash in your hand is going to need a good margin to cover the cost of money, the risk and unknown of when they'll be able to turn the item back into money...or how much they will sell it for.......or if it's stolen and the police come and retrieve it with no compensation.


----------



## DampDog (Apr 16, 2011)

Bero said:


> to release a wheel clamp or your car gets towed and you owe £250 + £20 a day then it's a no brainier to sell it to them!


LOL... Don't start me on wheel clamping...

Lets just agree to differ, it's a nice long Easter weekend, lets enjoy it..:thumb:

DD


----------



## Andrew125 (Apr 2, 2012)

DampDog said:


> Same here, some people have it tough for no good reason. Others are out of control and bring it on themselves. But I still hold the view these types of companies have only appeared in numbers over the past few years and "target" for want of a better word the most disadvantaged amongst us. If you have a some odds n sods lying around the house you want shut of and can get a few quid for fair enough you know the score. But if you're strapped for enough income to pay the bills it's not so nice a picture.


I'm not saying it's right it's the way business has gone..No longer will a Gentlemens handshake seal the deal. Those days are long gone, it's every man (or woman) for themselves so we all have to be extra careful how we spend our money and safeguard as best we can that we don't get into difficulties then find ourselves at the mercy of a finance company.


----------



## Bero (Mar 9, 2008)

DampDog said:


> LOL... Don't start me on wheel clamping...
> 
> Lets just agree to differ, it's a nice long Easter weekend, lets enjoy it..:thumb:
> 
> DD


I've got a great solution, come live in Gods country; up here wheel clamping and Gazumping is illegal; and your word (a verbal agreement) stands good in law :thumb::lol:

Enjoy too!


----------



## The Cueball (Feb 8, 2007)

Bero said:


> I've got a great solution, come live in Gods country; up here wheel clamping and Gazumping is illegal; and your word (a verbal agreement) stands good in law :thumb::lol:
> 
> Enjoy too!







:thumb:


----------



## DampDog (Apr 16, 2011)

Bero said:


> Enjoy too!


:thumb:.


----------



## Brazo (Oct 27, 2005)

Andrew125 said:


> You are absolutely right, when a payday loan is used correctly then yes they seem fair enough, *but when people get into trouble, miss payments for whatever reason then the problems can arise.*
> 
> Not that I have ever had to use a company like these being discussed but I did have a situation years ago where someone owed me a lot of money and whose cheques kept bouncing..I had to pay out an awful lot of money to other people on the strength of the job for work they had done but the client didn't settle the accounts. Now say for example I had a payday loan and needed the money to pay back the loan company..I'd be in serious financial trouble very quickly.
> 
> A lender nor a Borrower be is the best advice and if you can manage it thats the best way forwards.


But thats a different argument/thread completely and applies to any loan, credit card, store card transaction


----------



## Andrew125 (Apr 2, 2012)

Brazo said:


> But thats a different argument/thread completely and applies to any loan, credit card, store card transaction


Yes fair enough, you are quite right, my syntax isn't great. Apologies, I was trying to illustrate the issue when people get into trouble with finances in general.


----------



## Brazo (Oct 27, 2005)

Andrew125 said:


> Yes fair enough, you are quite right, my syntax isn't great. Apologies, I was trying to illustrate the issue when people get into trouble with finances in general.


Yeah I know mate:thumb: and its a good point just I feel relevant to all loans not just these, although I understand these pay day loans encourage you to put off the repayments !!


----------



## nickfrog (Nov 29, 2010)

pgarner528 said:


> Agreed, though to be fair in that example probably most of that is fees.
> 
> Personally, I think companies like this should not be allowed to exist. In the US, a lot of the states have usury laws which cap maximum interest rates.


Agreed. Most EU countries have usury laws too and the UK situation on that front is abhorrent, but that's because we do a lot to protect the "finance industry", as there are very generous political donors from that industry of course...


----------

