OFT Raid Payday Loans Companies

[legalese]

Re: OFT Raid Payday Loans Companies

:confused2: lol

[EXC]

Re: OFT Raid Payday Loans Companies

OFT??? But the payday loans are not doing anything wrong are they? They are doing everything right so whats the point in OFT getting involved? It has nothing to do with law its all contracts, OFT will find nothing they can do.

It has everything to do with the law. Payday loan outfits have to comply with the Consumer Credit Act - an Act of Parliament ie the law - and there are widespread concerns that some payday loan firms are not compliant in 4 areas:

• Giving loans without first checking adequately that the borrower can afford to repay them.
• Inappropriately targeting particular groups of people with clearly unsuitable or unaffordable credit.
• Rolling over loans so that charges escalate and the loans become unaffordable.
• Not treating borrowers that get into financial difficulties fairly.

The OFT launched a review into payday loans in Feburary.

[Guest]

Re: OFT Raid Payday Loans Companies

Personally i think there will be new legislation, as there has been overseas on these types of loan.
Whether it takes the form of new primary acts or secondary legislation that amends the CCA on short term loans, we will have to wait to see.

Can't come soon enough.

D

[stevread1]

Re: OFT Raid Payday Loans Companies

I mean by "reputable" companys that are working within the law and by the book. Secondly I would only borrow what I can afford to pay back.Thirdly if I want to purchase something I will save up and buy it. I would only use a payday loan for emergencies or as I said before if it works out finacially cheaper to borrow a small amount than pay extra credit fees ,charges etc for a misssed payment.
As

[Guest]

Re: OFT Raid Payday Loans Companies

I mean by "reputable" companys that are working within the law and by the book. Secondly I would only borrow what I can afford to pay back.Thirdly if I want to purchase something I will save up and buy it. I would only use a payday loan for emergencies or as I said before if it works out finacially cheaper to borrow a small amount than pay extra credit fees ,charges etc for a misssed payment.
As

1)I think they all operate within the law,2) I am glad to hear it, 3)If we all possessed your moral fiber there would be no problem.

D

[miliitant]

Re: OFT Raid Payday Loans Companies

even though it is made avaliable to the consumer, most consumers who take out these short term loans are targeted by the payday lenders and do not understand things like APR ETC, let alone the small print. i am talking of people on low income or benefits and are trying to pay an unexpected bill for example

these people need the protection of the law and i would think this come under "extortionate credit bargin" for a start, let alone unfair relationship

the payday lenders just say "its in the contract" that you signed. that does not hold much water as a judge will decide what is just and fair, not the lender. thats prob why so few claims go to court

[stevread1]

Re: OFT Raid Payday Loans Companies

1)I think they all operate within the law,2) I am glad to hear it, 3)If we all possessed your moral fiber there would be no problem.

D

After having credit problems in the past I have learn't the hard way. Its hard when they are dangling a carrot in your face but when you see what you have to pay back it makes you think twice. I just think about how many hours I have to work just to pay the intrest.

[stevread1]

Re: OFT Raid Payday Loans Companies

even though it is made avaliable to the consumer, most consumers who take out these short term loans are targeted by the payday lenders and do not understand things like APR ETC, let alone the small print. i am talking of people on low income or benefits and are trying to pay an unexpected bill for example

these people need the protection of the law and i would think this come under "extortionate credit bargin" for a start, let alone unfair relationship

the payday lenders just say "its in the contract" that you signed. that does not hold much water as a judge will decide what is just and fair, not the lender. thats prob why so few claims go to court

Totally agree with this point but even if they don't understand the small print they must know how much they are paying back before they take a loan out.

[miliitant]

Re: OFT Raid Payday Loans Companies

the thing is these payday lenders know a high proportion of debtors will be unable to pay back the loan after thirty days, thats when they get well and truly screewed with default interest and charges

thats what people do not understand, not the principle sum and interest advanced, but the default fees

speed credit i will give as an example of this practice where a £100 advance turned into £1500 in a matter of months

[stevread1]

Re: OFT Raid Payday Loans Companies

the thing is these payday lenders know a high proportion of debtors will be unable to pay back the loan after thirty days, thats when they get well and truly screewed with default interest and charges

thats what people do not understand, not the principle sum and interest advanced, but the default fees

speed credit i will give as an example of this practice where a £100 advance turned into £1500 in a matter of months

Yes this is what needs to be regulated, this is a "recently new" trend and needs to be throughly look out and new regulations imposed to protect the consumer from all the hidden charges and borrowing what they can not afford to pay back.

[Guest]

Re: OFT Raid Payday Loans Companies

There are adequate regulations requiring the disclosure of default charges and fees. The CCA and the EU directives state exactly what is required in pre-contractual information, in the main these requirements are adhered to by these companies, this is not the problem.

It is not good enough just to inform people about what they will have to repay on a loan, the legislation must go beyond that and make the lenders responsible for ensuring that the debtor is capable of repaying the money within the term, before they issue the loan.

If he doesn't, or if it can be shown that they have and still issued the loan despite a negative indicator then it should be unenforceable.

Roll overs loans and default charges are where the profits are in these loans, and this is what the legislation must address, but not by making debtors aware of them, this has been done, but by ensuring that debtors do not incur them.

It doesn't matter what information you put on the agreement, if you are desperate enough you will take the money and never mind the consequences.

D

[Guest]

Re: OFT Raid Payday Loans Companies

http://www.telegraph.co.uk/finance/p...day-loans.html

The Consumer Credit Counselling Service (CCCS) said it was on course to see a record number of people this year, having assisted almost 17,500 clients last year and just under 6,500 in 2009.

Such loans are intended as a short-term stop gap to tide people over for a few weeks but the charity said that 173 people it had seen this year had 10 or more of them.

The typical amount owed on payday loans has increased by almost a quarter in the last three years to reach £1,458, which is roughly equal to the monthly average income for a CCCS client.

The charity fears that the figures could climb higher still as hikes in fuel bills and food costs push more households towards seeking out "crocodile help".

Peter Tutton, the advice service's head of policy, said: "We would expect payday lenders to tell people there are better options rather than feeding into that and offering crocodile help. We need payday lenders to get on top of responsible lending.

[labman]

Re: OFT Raid Payday Loans Companies

"We would expect payday lenders to tell people there are better options rather than feeding into that and offering crocodile help. We need payday lenders to get on top of responsible lending.

Flying pigs spring to mind

[MIKE770]

Re: OFT Raid Payday Loans Companies

Might be as a result of a member of staff @ OFT was refused a loan????? O.K. probably not. lol