Many of you (without those no junk mail stickers) may have got up this morning and sleepily cleared away the assorted pizza/clairvoyant mystic/handyman leaflets that enterprising and early rising deliverers thrust through our doors, chucking them into the recycling bin with barely a glance.
So you may have missed this leaflet below from a bona fide loan shark with its jaunty cartoon and its tempting offers of small sums of money.
So what? Just chuck it away. Anyone with half a brain knows that you should steer well clear, right? Or maybe it's nobody's business if someone needs a bit extra.
So why does this leaflet trouble me?
We know that money can be had any time by popping along to a high street money store. Phoning a number on daytime TV or going online can mean money in a bank account within minutes. Pawnbrokers and payday lenders are mushrooming on high streets. This isn't much different, is it?
They offer small sums. These sums seem manageable. Even if you are too sick or disabled to go out, maybe elderly, or quite simply too ashamed to be seen going into a money shop, this might seem like an attractive proposition. It's even got a freephone number. People come to you to collect. You have to give them permission in writing
They are members of the consumer credit association which has a lovely swanky website.
They might *not* indulge in the practices reported elsewhere of these 'home loan' companies who encourage people to borrow more to cover arrears, who immediately offer larger sums to people who ask for small ones, or hassle you to borrow again if you manage to pay them off.
Okay, now look at the other side (sorry, I ripped it up before having a think about this).
What is missing?
Yep... no mention of APR any where.
Considering that a lender has recently had an ad pulled by the ASA for failing to display clearly their APR, surely a complete failure to mention it all is worse?
Emine Ibrahim picked up my tweet on this and helpfully phoned the company to enquire about APR. Eventually, someone was able to tell her it was 1559% (yes you read that right). She also discovered that an agent will call weekly (shades of hiding from the tally man?)
So, was I right to feel that this ad was troublesome? Citizen's Advice who were running a #paydaywatch discussion certainly thought so when I asked them and I have taken their advice to report this via their simple form which helps them to collect data on payday loan sharking before they forward it to the ASA.
If anyone wants to help highlight irresponsible advertising by payday loan companies, or needs advice over a payday loan, you can find out more here
Tags for Forum Posts: leaflets, loan sharks, pay day loans
Many years ago my late father had a large bank loan which he gradually paid off. His bank used to send him a bottle of Scotch at Christmas. One year it didn't come and he asked why. Wasn't he still a valued customer?
"Yes," said the manager. "But you don't owe us money any more."
In David Graeber's book "Debt: The first 5000 years" he talks about life in Britain before coinage was widespread. Everybody just loaned one another "money" and kept a record. Every year they would get together in the village square and square everything up. If someone who owed you money got sick you were very concerned about their recovery.
BTW, if you want to follow the a most outrageous and violent repression of peaceful student protests now at UCL then follow David Graeber on Twitter or look for #copsoffcampus. God knows what else the establishment is getting away with while we're all telling one another what a great guy Nelson Mandela was.
Or maybe people can use credit unions and avoid banks and payday lenders.
And unfortunately this lender offers neither an APR or an idea of how much say '£200 borrowed for 4 weeks' is likely to cost the borrower. A written response from the Citizen's Advice today (and I imagine they see a lot of this) describes this leaflet as "shockingly bad". I hope we can all agree on that at least.
That's fine - we all have our bugbears. As most people who know me will tell you, mine is purple bags
UPDATE:
Reply from Advertising Standards, the gist of which is
The credit advertising you object to appears to fall under the Consumer Credit Act 1974 and subsequent regulations. That being so, I’m afraid we are not entitled to intervene.
They then refer me back to Citizen's Advice who, as far as I know, don't intervene in advertising issues. Perhaps someone with knowledge of the law can explain why this Act is relevant and why it prevents them from acting.
Maybe trading standards is the way to go next.
It appears to me that the advertisement does not engage the relevant regulations (The Consumer Credit (Advertisments) Regulations 2010) because it does not mention anything about the rates charged, it does not say that the company provides loans to people who could not otherwise get credit and it does not offer any incentive for taking out a loan. That being so, there is no statutory requirement to mention the APR.
However, because the regulations are not engaged, you may be able to persuade the ASA to intervene, as they would appear, after all, to have jurisdiction because of that very fact.
Yes, the OFT is the licensing authority for lending businesses. This will change to the Financial Conduct Authority (FCA) on 1st April 2014.
Whoooop!
- I love it when Liz gets her teeth into something...
- I love it when Emina gets her teeth into something...
Now Liz and Emina got their teeth into this man, he had no chance really. Probably leave the country by Wed!
LOOOOOOOL x
Seriously though, questions about the loopholes in the governing bodies require looking into.
I see the owner of The Money Shop (Dollar Financial UK) is expected to pay out some £15,400,000 in refunds to customers.
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