Financial Communist Authority Kills Quick Quid
With Quick Quid now about to leave to the UK Lending market, it might be worth us taking a short pause to say "told you so". We have previously warned that QuickQuid and Wonga were about to pull the plug.
As it happens, QuickQuid has lasted a year longer than we predicted - if as expected - it closes its doors tomorrow. In this "Another Lender Pulls Out of UK" article back in 2017, we told everyone that our contact at the FCA had been told in no uncertain terms by these major lenders that they will pull the plug on the UK if the payday price cap was not lifted.
We were told that the FCA was going to lift the payday loan price cap, but for whatever reason, they changed their minds and didn't. This is something that they deny. Either way, they didn't lift it, and lenders have now withdrawn.
Shortly after we wrote that article, the Dollar Group closed, Cheque Centre closed, Wonga has gone, and now QuickQuid is about to pull the plug. Only Sunny remains out of the short term lenders that predate the FCA.
The problem is that the Financial Communist Authority seem to be under the impression that profit in finance is terrible, not allowed. Lenders should be public servants. This kind of thinking belongs back in the Soviet Union of the '70s and '80s. If we are wrong, there is only one other explanation: they protect the big banks from competition from private non-bank lenders. Whichever one of these two it is, the consumer suffers through lack of choice, higher costs or no service at all.
The FCA has killed the short term market, driven people into the hands of illegal money lenders, and still, they don't stop. Last week they announced they are going to attack the Car Finance market.
The FCA claim that they will save consumers around £165m a year in car finance fees. Anyone in business knows that whatever money the car showrooms earn through commission in arranging finance, they use to subsidise other areas of the sale. That is a whole new story that will hit the car industry next year.
It does, though, confirm our view that the FCA believe that they are the only ones in consumer finance that are allowed to make a profit—raking in excessive fees from lenders to share among their staff with huge bonuses.
The FCA is commercially incompetent. Few of them have ever run a business in the real world. Their record speaks for itself. It's a retirement home for failed Civil Servants. It is worth pointing out that fraud was lower pre-FCA, individual insolvencies were lower pre-FCA, costs were lower pre-FCA.
Luckily we had the good sense to get out of direct lending back in 2014. We knew what was coming.