PAY DAY LOAN
CAP.
The
government is to introduce a new law to cap the cost of payday loans. The cap
as yet hasn’t been set, but it’s thought that the government will set it just
below “taking the p*ss”.
This can’t
come quick enough for Ed Miliband who’s been campaigning against the enormous
cost involved in taking out a payday loan. The reason that Ed has went all
evangelical on this issue is because Labour and Ed Balls are going to have to
borrow £1.2m and £50k respectively from Wonga to repay what they morally and
financially owe the Co-operative Bank. And they’d rather borrow at a lower rate
obviously because they don’t want to get into power (if they ever do) and find
No 10 being repossessed from under them because they can’t maintain the £12.50
weekly payments.
Australia
has already gone down the rate capping route with a maximum 20% upfront fee and
an interest rate limit of 4% a month.
However,
penalties for late payment are allowed to be twice as much as the loan amount.
The Australians
have also introduced a breathalyser test for loan applicants because applicants
should really be sober enough to realise what they are getting themselves into.
And they must take a kangaroo with them who will explain “what’s that Skip,
this pay day loan company can fine me twice as much as the loan if I miss a
payment………………and Timmy’s fallen down a well”.
If that (apart
from the breathalyser and the kangaroo thing) happens here the sneaky payday
loan lenders that every payment is late. This will easily be achieved by tiny,
tiny, tiny writing in the contract that legally states that lenders use the
Julien calendar whereas borrowers and the rest of the world use the Gregorian
calendar. In other words every payment will be late because they’ll be due on a
date on the Julien calendar that no longer actually exist.
Days like
the 30th of February and March 35th.
There are also
plans afoot to give local council’s planning departments the powers to restrict
the number of loan shops in the High Street. In some towns the entire length of
the street is loan shops, and a Greggs. In more affluent areas the streets are loan
shops, a Greggs and a bookies. And let’s be honest here the pay day lender are
taking it too far when they’ve all got a Santa’s Grotto for Xmas with a Santa
who asks “and how much of a loan would you like for Xmas little boy”
On that very
theme Miliband has also said payday lenders should be banned from advertising
on children’s TV. His angle is that today payday loan ads, tomorrow pocket
money day ads. Whereby kids will able to borrow money to see them through till
next pocket money day, because they blew all their previous pocket money on
Moshi Monsters, sweets and cigarettes and alcohol.
Lenders such
as Wonga and Quickquid claim they wouldn’t lend money to children because that
would be immoral and ridiculous. Unless of course they had a Nintendo Wii or an
Xbox to put up as collateral.
They also
said they have strict procedures in place to assure that they don’t lend money
to people who have no means of paying it back.
The strict
procedures are searching questions such as; what is your name, and what is your
address, and only then if the prospective borrower can answer both questions,
or one of them, or none of them will they qualify for a pay day loan.
An
interesting footnote is that Wonga insists they have a customer satisfaction
rating of 91%.
And that’s
the first time Wonga and 91% have ever appeared in the same sentence.
Wonga and
5000% lots of time. Wonga and 91%, never, until now.
