Advert - quick quid

[Amphrax]

How on earth do these companies get away with this?

I dont usually bother listening to adverts like this and it got me interested on how much would one pay back based on the % on the advert.

As it says new customers can only borrow £1000. At the bottom it says 1734% APR that is obscene. So, if you borrowed £1000, you would have to pay back a total amount of £18,340.

Or, am I completely stupid and im not reading that right?

 

[Wazzerphuk]

Because they're short term loans. You're only meant to be borrowing for a couple of weeks or a month or two max.

 

[Moriath]

thats per annum .. usually these loans are over a very short period of time a few days or a week or two so you only pay 18,340 divided by 365 times the number of days you have the loan.

They are expensive because they dont need any id basically no credit scoring and stuff and are aimed at poor people who have no other option.

But yes if you took the loan out and wanted to pay it off over a year then 18k would be about right

 

[DaGaffer]

Loan sharking has gone legit. Sign 'o the times. Wonga.com is another one.

 

[Clown]

Why would it be illegal? Immoral maybe. Nobody is forcing anyone to use their services.

 

[rynnor]

They are obscene - its the sort of rate charged by loan sharks - it should be capped.

 

[Mey]

Short term they are fine (i.e 30 days max). The problem is, if you dont have the money now your not going to have it later. People then get stuck in the trap of borrowing each month.

They also hound you with texts/phone calls once you've used them telling you you can borrow more.

 

[Lamp]

Don't know if they still advertise, but Wonga used to have ads in the tube trains. Insane rates of interest. Borderline immoral.

 

[Clown]

To be fair, most business is immoral.

 

[Edmond]

Problem is, there is a market out there for it, otherwise they wouldn't be doing it

And they are being up front about how much they are charging too, it not like you can turn around and say its not fair, and that you didn't realise.

People will do it, and continue to do it. Just don't be one of the mugs that does

 

[Lamp]

And they are being up front about how much they are charging too

They are required by law, I think, to give the interest rate

 

[Edmond]

I'm sure a loan shark doesn't give you a 'broken bone' schedule either, based on you repayments

 

[russell]

It does play on desperate people though. When times are really hard people do silly things.

 

[Moriath]

Don't know if they still advertise, but Wonga used to have ads in the tube trains. Insane rates of interest. Borderline immoral.

Wonga advertise all over the TV now .. guess they moved up a notch with their 1k + percentage rate and can afford to hit more people hehe

 

[Punishment]

Still better than loan sharks, better to have the service and not need it than blah blah blah

 

[MYstIC G]

They are required by law, I think, to give the interest rate

Required to give the APR hence why they are all upwards of 1000%

 

[Vae]

It's definitely immoral and I wish it was illegal. It's preying on those least capable in society. Same as the way betting shops are opening more branches in the poorest areas to exploit those most in need of hope.

I'm normally not in favour of extra regulation but I do kind of wish the government would institute a cap on interest rates chargeable however companies like these would get around it by charging 'fees' instead.

 

[Raven]

These sorts of outfits prey on the weak in the modern consumer society. Once you go down the road of one of these scams there is little chance of getting out again.

When I was a nipper and times were hard my mum would just buy less shiny things.

 

[old.Tohtori]

When I was a nipper and times were hard my mum would just buy less shiny things.

Bah, you had it made! When i was young, my mum would buy my slightly rusted things if i was lucky!

 

[Everz]

It's definitely immoral and I wish it was illegal. It's preying on those least capable in society. Same as the way betting shops are opening more branches in the poorest areas to exploit those most in need of hope.

I'm normally not in favour of extra regulation but I do kind of wish the government would institute a cap on interest rates chargeable however companies like these would get around it by charging 'fees' instead.

I have never thougt of that till now, but you are right, the poorest areas of Wolverhampton (lolol all over) and Cheltenham have pretty much a bookies on each corner, and thats undermining, within a 10 minute walk from work to the my bus i'll pass 7 bookies.

 

[throdgrain]

This thread actually shows the lack of understanding with regard to APR

As has been said, these are short term loans, so the annual percentage rate is bound to look high. However, if you borrow £100 and have to pay back £110 by the end of the month it doesnt look so unfair, does it?

Edit

As an example from thier website -


Representative 1734% APR. Representative example: Borrow £50 for 30 days. The total charge for credit is £14.75. Interest is fixed at a rate of £14.75 per £50 loan (359% per annum). The Total Repayable is £64.75.

£14.75 doesnt seem like a huge fee to me.

 

[Raven]

Yeah that's fine if you do pay it back straight away. But people end up relying on these loans, if you are short one month then you will be short the next month because you will have had to pay it back, over time that debt snowballs. Within two months the debt will have nearly doubled.

 

[throdgrain]

Of course - I used ot collect debts for Quick Quid, I know how it works.

However, it's not the fault of the creditor if the debtor defaults - you need to know what you can pay back, it shouldnt be thought of a a trap to ensnare the stupid, even though sometimes it is.

Quite often people borrow money off these companies when they know they wont be able to pay it back, trust me, I've spoken to them

 

[Job]

Yes, but, Yes, but, if you don't pay the 1000 back could they ask for 18,000 grand a year later?

 

[throdgrain]

No they ask for a million bazzillion

Obviously not. If you dont pay on time they add a bit of interest then eventually give it to a debt collector. To be honest, if someone I didnt know wanted to borrow fifty quid till the end of the month I think £15 isnt too bad a charge, any less and it would hardly be worth doing.

 

[Chilly]

TBH though, the advert itself is genius. The bit at the petrol pump is quality.

 

[pikeh]

How on earth do these companies get away with this?

I dont usually bother listening to adverts like this and it got me interested on how much would one pay back based on the % on the advert.

As it says new customers can only borrow £1000. At the bottom it says 1734% APR that is obscene. So, if you borrowed £1000, you would have to pay back a total amount of £18,340.

Or, am I completely stupid and im not reading that right?

1734 isnt even that high for these, I've seen ones for up to 4000%. basically, you're fucked if you ever get one...

 

[Bahumat]

There is something about the size of the shop a bookies can have. It's cheaper or easier to just open another small branch. Saw something about it on TV ages ago

 

[Tom]

Amazing how many people here don't understand how APR works, or that the people to whom these loans are being offered are exactly the sort who are unable to get more palatable loans because they've spent it all in the off licence.