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  • #1

    Payday loan adverts could carry risk warnings

    Payday lenders face new curbs

    Financial Conduct Authority to introduce new rules governing advertising
    and the way firms collect and extend loans
    ..............Click     HERE to read more
    Last edited by 5corpio; 3 October 2013, 10:15. Reason: Media
    Tags: adverts, apr, banking, barclays, cca, claim, con, consumer, credit, customers, debt, expenses, fca, finance, financial, firms, guidelines, income, interest, interests, lenders, lending, loan, loans, money, payday, payday loan, payday loans, pdl, questions, rules, unfair
  • #2
    Re: Payday lenders face new curbs

    Full press release from FCA outlining new guidelines for payday lenders http://www.fca.org.uk/news/press-rel...-credit-detail

    Comment

    • #3
      Re: Payday lenders face new curbs

      So these checks they have to perform. Im guessing there not credit checks, as that's the whole point of a PDL so whats it likely to be? simple questions such as, yearly income, monthly expenses? because anyone can rig those details to be accepted, nothing is going to change.

      Rolling over limited to twice is a good thing, however I still think it should be capped at 0, unless specifically asked by the borrower.
      I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

      If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.

      Comment

      • #4
        Re: Payday lenders face new curbs

        Originally posted by SXGuy View Post
        So these checks they have to perform. Im guessing there not credit checks, as that's the whole point of a PDL so whats it likely to be? simple questions such as, yearly income, monthly expenses? because anyone can rig those details to be accepted, nothing is going to change.

        Rolling over limited to twice is a good thing, however I still think it should be capped at 0, unless specifically asked by the borrower.
        You're right - its just rhetoric matey - this is NOTHING more than they should be doing in the first place if they were following the requirements of the CCA1974 and responsible lending guidelines.

        Limiting rollovers to 2 sounds great on paper, but all that will happen is that people will turn to a different lender to repay the loan, (and hence pay 4,000% APR plus on a loan that they have already paid 4,000% APR).

        Because they will then have paid the loan 'responsibly' then original lender will then offer them more money and the cycle will continue...........

        A bigger issue in the 'industry' is the claim that the majority of people pay these loans back in time so what the FSA has got to look at is allowing these people access to cheaper credit (if they are able to borrow and repay money at such high interest rates). The biggest problem I see is that there is not a level playing field because those who take out payday loans are often refused credit by other lenders BECAUSE they have taken out a payday loan irrespective of whether it was paid back on time (which surely is an indicator they have behaved responsibly).

        The result of this is that people are then forced to return to the payday loan market and a deadly spiral ensues. Lenders can, of course, make whatever decisions they like when it comes to giving customers their money, however this unfairness in assessing 'affordability' is creating a two tier credit market, which, once you are in the 'payday loan tier' is very difficult to escape from.

        The only way currently if you have taken a payday loan (and many have used these companies with no consideration of what it may do to further credit assessments), is to not take a payday loan for at least 2-3 years so that lenders are more comfortable that you may not be in 'financial distress'.

        Some of the banking groups (Barclays for example, though I am sure this is no surprise) actually finance payday loan companies, so you have to ask what conflict of interests that may be taking place where an increasing segment of the population is being forced to take a route of more expensive credit..........

        SnV
        "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."

        The consumer is that sleeping giant.!!


        I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

        If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.

        Comment

        • #5
          Payday loan adverts could carry risk warnings

          Payday loan adverts could carry risk warnings

          This is a duplicate of the Blog Entry made on 3rd October 2013 09:29.

          *Payday lenders could be forced to place "risk warnings" on their adverts to advise borrowers about the dangers of debt.* It is one of several new...

          Click to Read More...
          .I'm the allaboutFORUMS News Feed. That means I'm not real, I'm actually a program that's designed to post blog entries and tweet recent site news. Please don't try and message me, I can't respond! Thanks.

          Comment

          • #6
            Re: Payday lenders face new curbs

            Originally posted by SaltnVinegar View Post
            You're right - its just rhetoric matey - this is NOTHING more than they should be doing in the first place if they were following the requirements of the CCA1974 and responsible lending guidelines.

            Limiting rollovers to 2 sounds great on paper, but all that will happen is that people will turn to a different lender to repay the loan, (and hence pay 4,000% APR plus on a loan that they have already paid 4,000% APR).

            Because they will then have paid the loan 'responsibly' then original lender will then offer them more money and the cycle will continue...........

            A bigger issue in the 'industry' is the claim that the majority of people pay these loans back in time so what the FSA has got to look at is allowing these people access to cheaper credit (if they are able to borrow and repay money at such high interest rates). The biggest problem I see is that there is not a level playing field because those who take out payday loans are often refused credit by other lenders BECAUSE they have taken out a payday loan irrespective of whether it was paid back on time (which surely is an indicator they have behaved responsibly).

            The result of this is that people are then forced to return to the payday loan market and a deadly spiral ensues. Lenders can, of course, make whatever decisions they like when it comes to giving customers their money, however this unfairness in assessing 'affordability' is creating a two tier credit market, which, once you are in the 'payday loan tier' is very difficult to escape from.

            The only way currently if you have taken a payday loan (and many have used these companies with no consideration of what it may do to further credit assessments), is to not take a payday loan for at least 2-3 years so that lenders are more comfortable that you may not be in 'financial distress'.

            Some of the banking groups (Barclays for example, though I am sure this is no surprise) actually finance payday loan companies, so you have to ask what conflict of interests that may be taking place where an increasing segment of the population is being forced to take a route of more expensive credit..........

            SnV
            It is a surprise to me that Barclays fund PDL's

            Comment

            • #7
              Re: Payday loan adverts could carry risk warnings

              I will believe it when I see it. I have seen far too many stories of people had by these firms to think they are fair or moral

              Comment

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