Harringay, Haringey - So Good they Spelt it Twice!
Payday loans websites blocked by Haringey council
From The Guardian, via @TimMorton2
Wednesday 26 June 2013 12.51 BST
London local authority has barred online access to the UK's 50 biggest payday lenders across its computer network
Haringey council has stepped in to 'help ensure residents avoid falling into spirals of ever-increasing debt'. Photograph: Dan Kitwood/Getty Images
A London council has banned access to payday loan companies' websites from its entire IT network in a bid to protect residents from "the pitfalls of excessive interest rates".
The move by Haringey council means users of around 3,700 computers in libraries, community centres and other council buildings will not be able to load the websites of the biggest 50 payday loan firms in the UK.
The council said it would "help ensure residents avoid falling into spirals of ever-increasing debt".
The controversy around payday loan companies has been gathering pace as debt charities and other consumer groups report growing numbers of people struggling with high-cost debt.
On Thursday, the Office of Fair Trading is expected to refer the sector to the Competition Commission having found widespread evidence of irresponsible lending in a year-long review of the market, and on Monday lenders will attend a summit with MPs and consumer groups.
Read the full article at www.guardian.co.uk/money
Replies to This Discussion
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Permalink Reply by james walsh on
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To put it in to context: Chess websites are also banned in these places. It's not like they've put any human effort into anything, they simply adjust existing computer security filter software. This would take less than an hour to do. (am i being too cynical ?)
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Permalink Reply by Abi on
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Nope - it would make sense to me as part of a sweeping programme of measure to tackle these loan sharks, but on its own it's quite pathetic really, definitely just put out there to grab headlines.
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Permalink Reply by Alan Stanton on
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And this is the same Haringey Council that has incurred a £6 million overspend on an £8.1 million school building project. Would it have been cheaper to ask someone from Wonga to project manage it? At least they might have turned up to all the Project Board meetings to keep an eye on the cash.
(Tottenham Hale ward councillor)
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Permalink Reply by Clive Carter on
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Speak for sixty seconds on the subject of Wonga without mentioning usury, poverty or scary debt collectors
I was disappointed that Nicholas Parsons took cash money and allowed his well-known voice to be used to promote this company. Thanks to Just a Minute, his voice is known around the world and quickly recognized in the UK, where he lends authority and legitimacy to this dubious operation.
Mr Parsons might be asked if he has ever been a customer of a pay day loan company that features outrageously high APRs (Annual Percentage Rates).
Perhaps the most insidious aspect of the pay day loan companies – especially Wonga – is that they trivialise the incurring of debt. Wonga's TV ads featuring puppet-like grannies make borrowing money appear as a recreational activity.
I doubt whether many of those in the market for payday loan services are going into council libraries and logging on to the computer service.
The council's 'blocking' of such web sites is idle. However, such a token gesture does make for good PR.
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Alex, I agree with your comment - although we may or may not agree on the reason.
My own concern is the principle of freedom of information. How far should computers in our libraries - funded by public money, of course - prevent library users from accessing websites which - whether we like them or not - are legal?
There's also the point made by James Walsh about filtering software. At least the last time I asked, the computers for library users were not covered by the Council's software block which prevented Haringey staff having access to such evil, pernicious websites as YouTube, Facebook and Flickr. What next? Should staff be scissoring-out adverts for payday loan companies from newspapers in the libraries?
It's true that an online loan company website makes it very easy to get into debt. It's also fair for Cllr Joe Goldberg to tell The Guardian that Haringey has backed the Haringey, Islington and City Credit Union as an alternative. But when he says the council "wanted to make it very difficult [for payday loan firms] to do business in our borough" , he drops into his usual marketeer's blather and bluster.
Joe Goldberg is a well informed and clever man. He must know perfectly well that payday loan shops are simply a new variation on the age old practice of Usury. The pawnshop and the old hire purchase "tally man" have gone online. As for stopping the spread of high street PayDay loan shops, Cllr Goldberg knows the odds are heavily stacked against each local council getting "the powers it needed to fight their proliferation".
So it's 'fighting talk' without the chance of laying a finger on his loanshark opponents. But never mind. Joe got his name in The Guardian.
(Totenham Hale ward councillor)
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APR is a wholly inappropriate way to assess the cost of a short-term loan, for obvious reasons.
This is the argument of the pay day loan companies themselves and they argue this, ostensibly because the APR includes the hefty arrangement fees, but mainly because the APR shows how expensive these loans are. However, unless there is some - any - benchmark for comparison, then the consumer has even less information.
That advertised APRs of 1,000% to 4,000% do not seem to put off some borrowers suggests that apart from others reasons, the demand is coming from the financially illiterate.
IMO, APR is a wholly appropriate way to assess the cost of these loans, if not for some borrowers, then at least for the authorities. These loans might start out as short-term, but sometimes end up as longer term. One reason these loans are extended or rolled over is because of the staggering APRs.
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THE virtue of APR (annual percentage rate) is that it takes into account all fees attached to the loan, plus the time value of money.
We can pretend that fees shouldn't be part of APRs for short term loans, but I can see no point in doing that unless the goal is to make this kind of borrowing appear less damaging than it is. The fees are the sine quo non for the loan, without which, as you say, the loan would not be made. The beauty of APR is that it provides a uniform basis of comparison for all consumer borrowing – and much business borrowing too.
The illustration uses small numbers. In the 'reasonable' 30% APR, are you including fees or not? How typical is a 30% interest rate of pay day lenders?
That little £50 loan mentioned, when taken via a payday lender, has the potential to be a time bomb.
end up being long term loans, because people can't pay them off.
Is the reason that people have trouble paying them off because of high APRs? A dollar is a dollar is a dollar. Don't forget that the fees need to be paid in the form of ... money!
Here is a discussion about this a few years ago on HoL. Little has changed except a wider recognition of the social damage caused by this form of commerce.
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This seems like quite a hollow move to me - OK so perhaps some of the poorest in our society do only have access to the internet via libraries, but it's going to be a tiny, tiny amount. Most people have smartphones nowadays, surely?
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Cllr Goldberg, one of the "hollow men, the stuffed men, leaning together, headpiece filled with straw?"
Well, certainly not whispering and never quiet.
The real hollowness is the abject failure of Cllrs Kober and Goldberg to ensure that Haringey's advice services were properly funded and organised to "offer advice and help to residents" to meet the tsunami of misery inflicted on the most vulnerable people.
Of course the queues outside the CAB are not as sexy as talking to Guardian journalists and having meetings with important people from Spurs and Lea Valley Estates to plan the carve-up "regeneration" of Tottenham.
(Tottenham Hale ward councillor)
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The Barnet Bugle made a Freedom of Information Act request which you can read on the WhatDoTheyKnow website together with Haringey's reply. This states that:
"The banning of particular sites, as mentioned in the press, was a Member [i.e. councillor] decision. The criteria used to determine which websites were included, involved extensive research via the internet of the pay day loan companies."
A list of the blocked websites was attached. It's depressingly long.
(Tottenham Hale ward councillor)
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There's an interesting blog post called War on Wonga by John Scholes. It was prompted by the critique of Wonga by Justin Welby.
Scholes' blog is called "The Trusty Servant" and he often has a fresh take on current news items.
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