Fury over loan company charging interest rate of 2,639,538.9%

[thebigman]

needs legislation to fix this and spellout exactly what interest can be charged. That's the reason I posted this I couldn't quite believe that this could be legal in this day and age. There will always be those who'll prey on the misery of others but we seem to make it so easy for them.

thebigman

 

[emarald]

i think this fits neatly into the legal term of "extortionate interest" tbvh - no way in hell this would be inforced through a court if defaulted imo.. It is about time an actual definition of extortionate was made available to these sharks, clearly these terms would only attract those incapable of paying or someone completely ignorant of financial apr'ism < hey made that up lmao..

100% Correct not a hope in hell

 

[wonko]

it's been going on for years - maybe not at 2.6 million% apr but at 1000's of % apr - various consumer groups have brought it up before - it's been raised at least once in the commons - nothings changed - the government either doesnt give a damn or has an active interest in maintaing these companies - so it's a little unlikely the law will be changed to make unreasonable apr's illegal

IMO most people deal with these sort of companies coz thats what they are encouraged to do - loadsa dosh is spent on advertising to persuade people they need stuff now - they have a right to it now - no one saves up anymore - and if you cant get a card or have maxed it out where do you go? the fact it's stupid interest rates is irrelevant to them - it's the I wanna sweety syndrome only with "adults"

 

[seo1394]

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[Dazza]

There's an advert on the TV at the moment down here for one of these firms, and the APR is something like 2500%, and I thought that was bad enough! Shocking how they are allowed to get away with it.

 

[Enticy]

There are so many rip-off merchants out there it really is unbelievable what they can get away with.

As for the Government, I don't think they will ever pass laws against this type of behaviour; most likely because they either have a vested interest. Think about it. These companies are lending money with the legal framework and they pay corporation tax on their profits. Therefore, the higher the interest, the higher the profit, the more coproration tax the Government can take.

I also believe the Government do not want to be accused of being hipacrits (spelling? lol). Some may remember "shared appreciation mortgages" and the Court cases associated with them. I know this appears to be slightly off topic but bear with me. Years ago these type of mortgage were being offered to retired folk who wanted to release capital from their property but not make any payments. This was when property was worth a lot less than today. In return the bank would be paid a percentage of the sale proceeds of the house. Now whilst this was a fair and modest sum at the time as houses prices hiked up the sums involved became huge and caused a lot of head aches.

However, I have recently discovered that the Government is running similar schemes. They are offering key workers loans to first time buyers of property and rather than making payments, they take a percentage of the proceeds of sale AND after 3 years they start charging rent as well. Lesson learnt: what banks can do the Government can do better. lol

Another good example is the bonus schemes in the banks that we, the tax payer own. The Government could have used its influence as a representative of our interest or passed a law to cap and/or reduce the bonuses but they didn't.

The Goverment has too much interest in the large profits made by charging big interst rates and so will never legislate against them.