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Created by: UtopiaNow

The evil opportunists behind payday Loans


I appreciate that Payday loans are useful to some people but there's more people who get into difficulties over payday loans than those who benefit from such a service. They should be more comprehensively regulated. I don't think they should make funds so easily available, there's just too many people wanting a quick fix without taking the time to consider the long term implications.

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Although these finance deals are marketed as short term loans, some scoundrels running these companies know that many will not be able to honour the short term agreement resulting in an escalation of interest which often spirals out of control. These companies know what they're doing and it's quite remarkable that it is legal!
High interest credit cards which are often offered to individuals with bad credit ratings come in at an average of 35% APR some people who depend on credit cards take such a debt to their grave. Payday loans are offered at many thousands of % APR (4,214% APR is a typical example at the time of writing).

A typical example of the problem

A young mum for whatever reason does not have enough money to buy food for her children.
She goes to a payday loan company and borrows £100 to feed her young with relative ease. The loan is based on an APR of 4,214%. Problem solved!
BUT, at the end of the next month, she finds herself in a similar situation. In a single year that £100 would become £4,314, and that's assuming she doesn't have to borrow any more! This is all simply because she wanted to feed her young children!
As shocking as scenarios like this may sound, payday loan companies are thriving on these strategies and are preying on the desperate. They use wording on their websites to come across as responsible caring lenders who wish to help you, but when you cut through all the wording and understand these are just legal loopholes, these companies operate in a manner which is in total violation of moral ethics by any stretch of the imagination.
My wife comes from a very poor background in Asia, and although her family are poor and want to find an easier way of living, they are generally content. But the daily hardships her family experience is nothing compared to the terrible stress of one living in the western world who's debts are spiralling out of control (regardless of their material superiority to the third world)!

So what's being done about regulating it?

A more important question is, why is the government not clamping down on these opportunists?
I like to think I voted into office a team of people that care about the common person. I also appreciate that short term loans can be of use and serve their place in the market. But you only have to surf the web and watch consumer programs to see how many people are getting their lives into a terrible financial situation. There have even been reports of suicides because the individuals felt there was no way out! The problem is, except for such an individual's family, we are all just numbers and no one seems to care.
Then there's crime... I'm sure some of the borrowers are less than ethical individuals, so if they get themselves in these terrible situations, isn't that likely to push up crime rates as a result of their desperation?
I'm not sure about you but I cannot understand why these companies can operate so freely. There have always been loan sharks about, but the companies I'm discussing here are just as bad but look more legit by having a higher public profile such as advertising on television. Just because their terms and conditions promote responsible borrowing, they come across as honest and legit. What a joke. Banks and large companies always make their money out of the small people. Payday creditors do the same thing but employing much more sinister and deceptive tactics.
I'm not a communist, but all this is doing is increasing the gap between the rich and the poor. Something that should not be going on in these modern times.
Remember, to the world you are just a person, but to another person you may be the world!

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