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Complete Ban On Legalized Loan Shark Payday Loan Adverts

One of the things that really boils my blood is the amount of payday loan adverts that get away nowadays. Advertising and preying on the weak with quick loans, with insane stupid APR charges ranging from 1400%.

One such advert that really grinds my gears is an ad called Oakham, that in every adverts promotes people on benefits who need a quick loan up to £1000. Anybody who in the past has been on benefits... will know that benefits can be cap or sanctioned at anytime. They offer loans with APR of 1426%

Another is Sunny that the guy advertises, Stress Not, whilst the company advertises APR of 1299%...

This is one of the reason's with have so many people in this country who end up in debt.... losing their cars and homes as a result of these companies. Yes anybody who takes a loan out with these companies either are nuts to begin with, or easily lead into them.

It's time they were banned from TV.

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Original post by LastSonOfKrypton
One of the things that really boils my blood is the amount of payday loan adverts that get away nowadays. Advertising and preying on the weak with quick loans, with insane stupid APR charges ranging from 1400%.

One such advert that really grinds my gears is an ad called Oakham, that in every adverts promotes people on benefits who need a quick loan up to £1000. Anybody who in the past has been on benefits... will know that benefits can be cap or sanctioned at anytime. They offer loans with APR of 1426%

Another is Sunny that the guy advertises, Stress Not, whilst the company advertises APR of 1299%...

This is one of the reason's with have so many people in this country who end up in debt.... losing their cars and homes as a result of these companies. Yes anybody who takes a loan out with these companies either are nuts to begin with, or easily lead into them.

It's time they were banned from TV.


I don't think people, who are in a desperate situation already, feel they have anything more to lose by taking out a loan if it gets them past an immediate emergency. For these people, the equation is all about keeping the wolf from the door one week to the next.

Christmas looms and the pressure is on for parents to provide for their children.
One only has to look in a supermarket to see the shelves filling up with stuff for the one-day-wonder.

The problem is with desperate people who feel that £200 will get them through Christmas and they can pay back a seemingly affordable weekly instalment over a handful of weeks.

Stupidity and naivety are not at the forefront of their thoughts - and the loan companies rely on that knowledge.

Which is why the government have brought in laws to at least limit the financial damage by capping the interest payable to 0.8% a day, with default charges not exceeding £15 and all interest, fees etc. are capped at 100% of the original sum, no matter what the equivalent APR of the original loan.

In other words, a £100 loan taken over 30 days by law is capped at a maximum £24 for interest and charges in total, if paid on time. Even when defaulted, the new laws means the credit broker cannot charge more than £100 in absolute total.

These firms cannot now request an individual’s bank details or take a payment from their account without their explicit consent first. Payday loan brokers will also have to include their legal name, not just their trading name, in all advertising and other communications with customers, and state prominently in their ads that they are a broker, not a lender.
(edited 6 years ago)
I totally agree the adverts should be banned. It doesn't actually help the people who take them, it just gets them into a negative spiral of not being able to meet the interest rates, or having to take out endless payday loans.
As far as I know all of those companies show you how much you’ll need to repay, they also give you the interest rate and warn you that your stuff can be repossessed if you fall behind on paying. If people still choose to take loans from them that’s their choice
Original post by Underscore__
As far as I know all of those companies show you how much you’ll need to repay, they also give you the interest rate and warn you that your stuff can be repossessed if you fall behind on paying. If people still choose to take loans from them that’s their choice


It is their choice in principle, but in practise, they're advertising these services to people who have no real option besides it, or who are barely scrapping by day to day. Yes, they choose to take it on, but for most it will be in a more desperate moment, where it may not usually have been something they'd do.
Original post by shadowdweller
It is their choice in principle, but in practise, they're advertising these services to people who have no real option besides it, or who are barely scrapping by day to day. Yes, they choose to take it on, but for most it will be in a more desperate moment, where it may not usually have been something they'd do.


So surely these loan companies are better than the alternative?
Original post by Underscore__
So surely these loan companies are better than the alternative?


Not really, as it get them stuck into needing loans to get by; yes in a complete emergency where there is no other option they may be useful, but otherwise they just prey on vulnerable people who would scrape by without one but get swayed on wanting do do xyz with the money and then are committed to insane interest rates that they struggle to pay back.
Original post by shadowdweller
Not really, as it get them stuck into needing loans to get by; yes in a complete emergency where there is no other option they may be useful, but otherwise they just prey on vulnerable people who would scrape by without one but get swayed on wanting do do xyz with the money and then are committed to insane interest rates that they struggle to pay back.


It sounds like you’re essentially saying these companies are bad because they tempt people to borrow money they don’t really need to borrow. I suppose there we disagree; I think people are responsible for their decisions, if a loan is too costly don’t take it out
Original post by Underscore__
It sounds like you’re essentially saying these companies are bad because they tempt people to borrow money they don’t really need to borrow. I suppose there we disagree; I think people are responsible for their decisions, if a loan is too costly don’t take it out


Not at all - I don't think the existence of the companies is necessarily an inherently bad thing, just the way they advertise them. Yes, people are responsible for their actions, but the adverts specifically target people who are in a position where they don't have a huge number of alternate options, and they do so in a way that makes the loans look like a good thing, where in reality they rarely are.
Original post by shadowdweller
Not at all - I don't think the existence of the companies is necessarily an inherently bad thing, just the way they advertise them. Yes, people are responsible for their actions, but the adverts specifically target people who are in a position where they don't have a huge number of alternate options, and they do so in a way that makes the loans look like a good thing, where in reality they rarely are.


You seem to be bouncing between two positions but perhaps it’s me confusing things. On the one hand you seem to be advancing the idea that people who use payday loans are desperate for cash and use these companies out of necessity but then you seemed to switch to saying those who use these loans are people who essentially convince themselves they ought to get a loan in order to buy something rather frivolous. If your belief is that their main customer base is the former then I’ll ask again: surely they are better than the alternative? If it is the latter then surely it is down to people to make sensible financial decisions?
I had a friend who got into many thousands of debt from these payday loans and i've seen the effect they have on people. It's horrible.

It was entirely their own fault, they took a poorly paid placement and didn't live within their means, but it got to the stage where they were having to borrow money to make it through the month or taking out a loan to pay off another loan. Remember one instance where they took out a £600 loan knowing they'd have to repay £1,200 and didn't think twice of it, even though they were unemployed at the time. It was ****ing ridiculous and numerous warnings from people were ignored.

To some degree yes, if someone gets into that much debt it is their own fault. However let's not pretend that these loans aren't marketed to people on benefits, low income or who are otherwise financially unstable.

It's the same with those places like Brighthouse who let you loan a sofa for £10 a week but it ends up costing you triple.
Original post by shadowdweller
Not at all - I don't think the existence of the companies is necessarily an inherently bad thing, just the way they advertise them. Yes, people are responsible for their actions, but the adverts specifically target people who are in a position where they don't have a huge number of alternate options, and they do so in a way that makes the loans look like a good thing, where in reality they rarely are.


If they had a huge number of alternative options, they wouldn't need payday loans...
Original post by Underscore__
You seem to be bouncing between two positions but perhaps it’s me confusing things. On the one hand you seem to be advancing the idea that people who use payday loans are desperate for cash and use these companies out of necessity but then you seemed to switch to saying those who use these loans are people who essentially convince themselves they ought to get a loan in order to buy something rather frivolous. If your belief is that their main customer base is the former then I’ll ask again: surely they are better than the alternative? If it is the latter then surely it is down to people to make sensible financial decisions?


I think there's a medium between necessity and frivolity, which it tends to prey on. There are things you can live without that also aren't frivolous, like getting something repaired, or some work done, that could seem like a grey use of of a payday loan until you actually get stuck in the interest.

Original post by Rinsed
If they had a huge number of alternative options, they wouldn't need payday loans...


Which is what I'm saying, essentially; they reinforce the idea of not having other options hence people resorting to them.

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Original post by shadowdweller
I think there's a medium between necessity and frivolity, which it tends to prey on. There are things you can live without that also aren't frivolous, like getting something repaired, or some work done, that could seem like a grey use of of a payday loan until you actually get stuck in the interest.


If it is not necessity then it's people taking out loans they could do without and at that point I think it's fair to blame people for their own decisions. Before taking out these loans people are warned of the consequences. It seems quite nonsensical to criticise a company for providing a service that people clearly want.
Here's the thing.

If you don't consider the terms of these loans good or advantageous, they can't force you to get one.

If someone else considers this to be a useful product, that's their call to make, not anyone else's.

As for complaints about the APR, you're not meant to keep the money for a year. It's sort of silly that they're required to express interest in terms of APR at all given that's not remotely the intended term of the loan.
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Avatar for Avaia
Avaia
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I couldn't agree more with this post, the APR on them actually disgusts me...It really is legal loan sharking, and there are many examples of people committing suicide who have directly quoted these payday loan companies as a reason.
Original post by shadowdweller
Which is what I'm saying, essentially; they reinforce the idea of not having other options hence people resorting to them.


Erm, what if the idea is, you know, true?

What other magical options do you think are available to people who need to resort to payday loans that they're presumably too thick to think of themselves?
Original post by Avaia
I couldn't agree more with this post, the APR on them actually disgusts me...It really is legal loan sharking, and there are many examples of people committing suicide who have directly quoted these payday loan companies as a reason.


The problem is twofold. Number one, these are loans meant for a week or so, not years. The nature of compound interest is such that what is a moderate charge over a short length of time might be massive over a longer one. If you need a few hundred quid and are getting paid in a week, the £20 or so it might cost you may well seem worth it. Yes, that's a big APR when you add it up, but it's not fair to compare these to a mortgage.

Secondly, payday loan companies don't make particularly big profits on these loans because these people default so often. If they charged much less they'd lose money. If you say these companies may not charge so much, they'll leave the market. If you accept that people take payday loans out of need rather than desire, this would mean desperate people who may have found themselves with just one undesirable lifeline may end up without any options at all.
Original post by Rinsed
Erm, what if the idea is, you know, true?

What other magical options do you think are available to people who need to resort to payday loans that they're presumably too thick to think of themselves?


I'm not sure why you think I'm saying there are other options? The entire point is there isn't, but that payday loans are a truly horrific solution still.
Original post by shadowdweller
I'm not sure why you think I'm saying there are other options? The entire point is there isn't, but that payday loans are a truly horrific solution still.


A poor solution is better than no solution surely?

And, to be honest, if they are simply used to tide someone over till payday, I don't think they're that bad an bad option at all.

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