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Why are payday loan companies free to shaft the poor? -- Be warned!


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Have a look at this!

Why are payday loan companies free to shaft the poor?

 

Charging extortionate rates of interest, these companies are robbing the poor. I know, because I worked undercover for one

 

 

http://www.guardian.co.uk/commentisfree/2012/sep/09/payday-loans-shaft-the-poor?INTCMP=SRCH

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So these people who wouldnt be able to obtain a loan from a "reputable" banking institution are permitted to borrow, without any checks if they can sustain the repayments, are offered loans at the most offensive interest rates.. !!

 

 

The people who make these staggering profits possible are among the most vulnerable in society. My Provident colleague and I collected money from the unemployed, benefit dependents, alcoholics, single mothers, teenagers and people in fragile mental states who just didn't understand how badly they were getting shafted.

 

And the customers were so nice about it. A large part of the training for the job at Prov revolved around what agents should do if customers got tired of being robbed and decided to beat you up. Depressingly, though, I didn't get beaten up once – mostly the people I was robbing just made me tea. In one instance we loaned an old lady, who was on incapacity benefit and received child benefit for her three grandchildren, £1,000 (for which she would have to repay £1,950).

 

The Provident agent then gave her a "LoveToShop" Provident Gold credit card with an APR of 254.5% (though, strangely, he didn't mention that bit). She begged us not to give her the card, because she didn't trust herself with it. The Provident agent just said: "Put it in your wallet or cut it up if you want to. The power is in your hands." And then all the irony in his body instantly evaporated and he collapsed in a heap on the floor … metaphorically speaking.

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The silly thing is that many of the PDL companies that advertise in the UK, are actually based in the US. We have seen posts on here where people have tried to contact registered addresses and found out they are just Po Box no's, with the company not having any staff in the UK.

 

Wonga/Provident are based in the UK, but I bet they are mainly foreign owned through various investment companies.

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Provident and the like are just part of the problem. There are those who would argue that if it were not for them, poor people would be driven from legal loan sharks like Provident to illegal ones.

 

The root of the problem, in my view, is lack of robust regulation. We need interest rates capped by law, as they are in many other companies, and we need much more stringent regulation of the whole debt industry.

 

I have long thought that anyone who sells credit should have an individual licence. So should anyone who collects debts. This is already done in some US states. Those who fail to act compliantly lose their licence - as do their managers if they encouraged poor behaviour, or knew about it and did nothing. It would go some way to making sure these creatures operated properly, and prevent companies phoenixing.

 

The OFT has been unfit for purpose for a long time, just like the FSA.

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What has happened to the much promoted successor to the OFT proposed, this was supposed to give ''teeth'' to legislation and regulation.??

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