The mainstream media took another swipe at the lending industry this week when they ran a story documenting how there was a 57 per cent rise in the number of complaints from consumers relating to fast credit loan providers.
According to many ‘respected’ sources the figure has never been as high and people in high places are urging the lending industry to do more to help the people most negatively affected. 'Respected sources' of course usually means journalists making things up.
This really boils us over.
It is the loans industry that should be crying about unfair treatment. The lending sector has been completely savaged by the FCA and the government as part of their clampdown on the ‘high cost’ loan industry; yet loan sharks and doorstep lenders have so far been left to run riot and get people into dangerous financial positions.
The payday loan industry was already facing a hard time, even without the interference of the FCA, as new rules drafted in a few months ago meant that consumers had even more protection from debt – at the expense of loan companies.
A loan service, like ours, has a business model simply based upon finding lenders for people who need a little cash injection into their pay packet - we pride ourselves on getting that said cash into people’s accounts quickly. Our customer service rating is top notch and we welcome repeat customers back regularly. Not many people complain about the rates that are in place for repayment; they know that they will pay slightly over the odds in terms of interest but that is due to the fact that they are receiving instant cash into their bank accounts. The FCA, however, feel the need to make businesses like ours struggle against the tide.
Listen to this.
The FCA thought it would be a good idea to basically say to debt ridden people: ‘if you can’t afford to pay the debt back, you don’t have to.’
Yes, you read that right.
The new ‘protections for the consumer’ that have been put in place are completely ludicrous. Someone who borrows money, from whatever source, should always expect to have to pay that money back. Unfortunately, that is how the world works folks. Right?
Well, actually, no. The FCA has other ideas. In some instances, if a person is getting in distress about having to make repayments that they can’t afford, the FCA will force this debt to be written off. Now where is the initiative for anyone to pay anything back? And what kind of message is that giving out to people? Everyone will just cry wolf and try to get out of making repayments.
A loan where you don’t have to pay anything back? Everyone will want to have a piece of that! Completely bonkers.
Secondly, what is this going to do to loan providers? Can you imagine the FCA telling the banks that some of the loans that they had handed out aren’t going to get repaid because the debt is going to get written off? It wouldn’t happen would it? Yet, the payday loan industry is expected to put up, shut up and still run a tight ship through this.
That is why many lenders have left the industry. How can anyone make a living if they lend money to someone knowing in the back of their mind they may never get their investment back?
The decisions that the FCA are making are having a detrimental effect on everyone.
The FCA will claim that they have clamped down on the industry meaning that more people are protected from unrealistic repayment terms, but they have made many people’s situations much worse.
People are finding it difficult to access the cash that they need because of ill-advised restrictions that have been placed on certain loan services, meaning that these desperate people are going to doorstep lenders instead and putting themselves in vulnerable positions.
The loans industry is taking a real bashing and many regular users of such services are being completely cut off from accessing cash that they require. The FCA are putting people’s livelihoods in danger by meddling and coming up with hair-brained schemes.
They need to get in the real world. What good is it going to do telling people that they can have a loan and potentially not have to pay it back? It’s completely ridiculous. They’re setting a real precedent and the slope looks very slippery from where we’re sitting.