Government gives payday lenders a good slap

The government has just this minute announced stricter rules for payday lenders, so that less desperate people’s lives are destroyed by their outrageous fees.

The Office of Fair Trading (which will be replaced next year by the more powerful Financial Conduct Authority) has been investigating payday lenders and quickie loan companies for a year, and recommend that there should be a curb on advertising and more careful scrutiny of their dealings.

Payday loan companies must also be more up front about their astronomical APRs, which mean that if you borrow a hundred quid, you can run up A BILLION SQUILLION POUNDS (ballpark figure) within a matter of weeks. And that means no more hiding their rates away in teeny weeny Terms & Conditions at the bottom of the screen.

Perhaps the best thing about it is that there will be less Cash 4 Kidney ads on the TV, and David Dickinson will have to advertise something more wholesome instead, like bukkake, or people trafficking.


  • chewbacca
    Here's a point I've previously made in another thread. The APR isn't the full story, as it REPRESENTS what you would pay if you took the loan over the year. Thing is, these loans are provided on the basis of the short term i.e 30 days. When you look at it like that, you're looking at, for example, a £250 loan being repaid at ~£290. So, about 17.5% extra. Try getting a cash advance on a credit card for 17.5%, try getting a bank to lend to you for a month. Exactly. Notwithstanding the fact that those needing these types of loans tend to be lower-income and struggle when anything out of the ordinary crops up. Payday loans fill a niche. Yes, people get themselves into horrendous debt with them, but that's through their own stupidity and constant deferments (rollovers) for whatever reason. Thread abound that the bigger payday lenders will readily agree a payment plan, freezing all interest and allowing you to pay off ~£20 a week while stopping further loans. Look, they're a business, they exploited a gap in the market. But are they not better than illegal loan sharks? The constant hate for these companies isn't 100% justified, because people are too stupid to see past the headline 4000%+ APR.
  • Quietus
    Exactly what chewbacca said. Most of the loans come out at a reasonable rate for a short-term loan, and you wouldn't get it elsewhere.
  • Kevin
    Well said. If the companies have to actually assess people then they won't be lending them any money will they. People use them as they don't have a choice. A lack of personal responsibility for what people sign is never really mentioned is it.
  • Ian
    If the government weren't so busy pulling the eyes out of lower-middle income families every which way, there'd be no market for payday lenders.
  • Sicknote
    It's good they're cleaning up the PDL industry but it would be a shame to clamp down or even restrict the businesses to the point their business model doesn't stack up. I've said some very harsh things about their customers but I do believe they provide an essential and as chewbacca very clearly states - what other avenues exist for a short term immediate loan. From my recent experiences with renewing my HSBC mortgage; I have a top notch credit score, no credit cards or loans and with a sound financial history it was still akin to nailing my feet to the ceiling with my arms tied behind my back.
  • shiftynifty
    Capitalism, you say....yeah right....thatchers children eh...
  • LanceVance
    I just hate the fucking adverts. Yes we get it love, Earls a cunt.
  • Tony B.
    Good they are tough on those high-profile shops - this looks like the Gov are doing something about the money sharks. However, bankers and brokers stole much, much more money than these little lenders yet none had to return the loot, nor have any gone to jail. Why is that?
  • Teddy
    Last three lines got me in hysterics :D

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