Wednesday, 29 October 2014 19:22

Here we go again – Now Loan Brokers To Be Banned

The stupid people of this world are trying to ban something else. We really are beginning to lose patience with the utter naivety of some of these idiotic financial wannabe supermen. They really should know better if their job is to protect the public.

This time the RBS are saying that they are working to ban Payday Loan brokers. Brokers are websites that don’t actually lend but offer to find a loan for people in exchange for a fee. They are working with the Competitions and Market Authority to prohibit people charging admin fees for loans.

In this article we will explain what an silly idea this is, how to quickly bypass it and why the rules will never work.

This article is written by Quick Loans ourselves. It is a full and frank assessment of what should be done and what can be done to solve the admin fee issues. It’s written with inside industry knowledge and some authority of real world practices.

As people who know the lending industry inside out – let us tell you now that trying to ban admin fees / brokers is 100% an absolute waste of time, a complete and utter waste of time and effort – again.

We make our money if we can get people loans, the system is automated and we have no reason whatsoever to charge for it.

We don’t charge for any admin fees for loans, so we speak from impartially on this subject. Whether they are banned or not will have zero effect on our business.

Bans will not work; if we wanted we could sidestep these proposed rules in 5 seconds flat. How long do the people in their Ivory Towers think it would take others (street wise crooks) to work out how to bypass them?

If we wanted to be a bid dodgy, we’d say ok – we won’t charge an admin fee of £60 but we will charge a Credit Check fee of £60. Well bloody hell, that’s taking us 5 minutes to be able to outwit some highly qualified university educated fella who’s been dreaming up new rules for the last 2 years.

Or failing that we could simply relocate our website offshore – outside of licensing, outside regulation and outside of the UK authority.

Now what are they going to do about that? There is nothing they can do.

One massive example is a huge admin fee scam going on at the moment. This one is based out in India and they cold call people pretending to be sites like ours. People then send admin fees to India. It’s a huge scam that has been going on for the last 6 years. The fraud squad have been unable to end it, if the  fraud squad can’t stop it – what will these new rules do?

It's not that the fraud squad doesn't have the laws to use, it's that they struggle to find someone in  a far away place. Even if they do, they get a slap on the wrists from the Indian judciary and start again. What's the point?

We hate the admin fee websites as much as anyone, we really hate the fact that people prey on those that are desperate by taking their last pounds off them in return for nothing. If it were up to us, we’d take them out and give them a bloody good hiding – but we can’t.

Regulators and authorities need to grow up and start trying to fix these issues rather than banning them. They need to get in the real world and fast because the owners of these websites don’t care about their stupid rules, it's almost like trying to ban Cancer. This is simply playing "whack a mole" where your opponent takes 5 minutes to adapt but you can only move one a year - It's crazy to even think banning will work!

If anything, forcing people underground could make it worse. As we understand it, some are being forced to pay the money back and indeed some are. However, ban them and the sites that come after them will not pay back any money at all. 

The answer, and this is the only answer to fix this problem, is education. Educate the public that paying an admin fee is always a scam.

Unfortunately it is human nature that if someone pays for a service, they get a better service. This is usually true, but not with lending sites like ours. However, we are where we are and this attitude needs to be countered somehow. People need to be told quite clearly that if they pay upfront for a loan, then they are being ripped off. We know the industry; we can say that without doubt.

If the RBS spent the same amount of money on adverts educating people- that it does on trying to get idiotic laws changed or brought in, the problem would be massively reduced. Imagine a £2m pound advertising campaign that warned people that paying for any type of admin fee is a waste of time and a rip off!

The RBS and the Competitions authority need a campaign that repeats the question below. This question is all you anyone needs to know. This will solve the problem of any type of upfront fee, no matter how good a salesman, no matter how slippery a con man, no matter what new technique or method these sites come up with – there is no answer to it.....

“Can’t you take my admin fee out of my loan?”.