Ranty Friday — Payday Loans

I have had this rant in my head for months but this week I went over the edge with rage.

I have a real problem with these sorts of loans and not only how they operate but how they advertise.   They may it look easy, they make it look like the solution to a problem.   It is not.

And now we have a lender using Kerry Katona to front their advertising campaign “because she has a well publicised poor financial history”.  She is an ex bankrupt so Cash Lady thought that Kerry would be perfect for their adverts.

What?  On who’s planet?   Kerry didn’t get herself out of financial ruin by using Payday loans, in fact I can’t imagine she has ever used them.

These loans are aimed at members of society who can’t get a loan any other way.  Normal banks and lenders won’t lend to them.   And I feel for them.   Needing money and not being able to get it is terrible.  It is desperate.    And these loan companies know that.   Hence their extortionate interest rates.

The company that Kerry is advertising has an APR of 2,670%.   How in God’s name is that even legal?

By their own calculations if you borrow their top amount of £300 for thirty days you have to pay back interest of £52.20.

So if you were so desperate for the £300 you had to resort to this type of company where are you going to find £352.20 from at then end of the month?   And if you are then eating into the next month’s salary or benefit money and so the cycle continues.

If Kerry really wanted to put her financial history to good use why didn’s she become the face of the Money Advice Service?   A free organisation that can help with money worries or the Debt Advisory Service who do something similar.

This kind of lending is morally wrong.  Yes, there are people in dire financial need but surely this is not the answer?

 

 

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  • This is part of a discussion set I use when I’m working with young people (16-25 year olds). Their thoughts behind it are very interesting and you’d probably be shocked to hear that not a lot of them use these types of loans BECAUSE they can’t afford the repayments. However, on a regular basis, one lad borrows £50 on a Friday, pays it back on a Monday (from this benefit money and at £60) and has usually had a rocking weekend and it’s “cost” him a tenner. He says it’s better than borrowing off his mates. You can imagine which direction I took that conversation in but that’s not really the point. The point is that it’s all too easy to get that money in the first place.

    • yes you are right. And a point I hadn’t really considered. It is just too easy. No real “affordability” checks being done. Just have the cash and to hell with it.

      Wrong.

  • That is so horrible. I always thought Kerry Katona was a silly cow, but this this has really proved it. How can she be so thoughtless as so take money from a company that takes money from people who are at absolute rock bottom.
    Borrow money from us, pay back sh*t loads and you can pay Kerry Katona’s wages! WRONG!

  • WRONG WRONG WRONG!
    Now I will get doubley raged up when I see PayDay loans advertised … I can’t even LOOK at a prawn ring either thanks to her.
    ARGH

  • Couldn’t have put it better myself. These companies should not be legal OR have a maximum APR they can set.

    And using Kerry Katona?? Really??? Her being the ‘face’ would put me off instantly anyway! Hardly a money spending role model!!!

  • I agree with you wholeheartedly on this one.
    As a former debt counsellor, I know how people get in such difficulties and are taken in by marketing campaigns like this.
    Celebrities really need to question their ethics when representing brands. Carol Vorderman is another sinner in this way.
    Disgusting and should have to witness the dire plights families get into as a result of such lending companies. Well done you!

  • As bad as loan sharks! They even allowed her to comment on programme on shocking celeb exploits of 2012 with her history everything she said sounded ridiculous! x

  • I haven’t seen this advert, I probably would hurl something at the tv and break it in rage!
    These loan companies are only slightly less evil than loan sharks. They should be banned! 🙁 And don’t even get me started on Kerry Katona!!

  • I get so angry at these adverts in general, this is the reason many are losing their houses, it’s a quick fix with serious long term consequences 🙁 great post…better than my silly little one but it did annoy me 😉 x

  • Agree with you 2670%!
    Should WE canvass the sort of consumer protection programmes run by the BBC to expose more fully than at present the risks facing the “customers” [mugs] who are sucked in to deals with Wonga, etc?
    Individual comment will be ignored by the companies but let Esther R and Ann R loose and there may be a chance.
    I don’t think any law is being broken at present – ergo change the law!

  • Pay Day Loans, Consolidated Loans are the worst thing to do, they put you in more debt not get you out of it, it makes me so bloody angry when I see these adverts.

    If people are in debt they need to go to the CAB for debt management, it’s free and it works, I used them 10 years ago and am now debt free.

    These so called celebrities should know better and set an example, as people look up too and respect them, if even if it is an idiot like Kerry Katona!!!

    Rant Over

  • I’ve not seen the ad with Kerry, though I have seen a few of those with the thousands of percent APR. They’re the worst kind of legal loan sharks there are.

  • Gawd, I hate these adverts. One had me in a rage a few weeks back which tried to tug on the heart strings while advertising an APR similar to that you mentioned.

    Cash Converters and the like are just as bad. I used to work next door to one, and would see a lady who every month would take in her daughter’s pink character TV to get a short term loan. Poor girl would only have it back for a few days before mum would be skint again and have to trade it in.

    Having lived on next to nothing for a number of years, I now won’t even have a credit card, let alone get a loan. If we can’t afford it outright, we don’t get it. Simple as! It’s sickening that we live in a society where even those with little money want to enjoy the expensive things in life and become targets for unscrupulous companies like this!

  • Oh no, I hadn’t seen that she is doing that! However, more fool whoever hired her. She is such a bad example that it would (hopefully!) put most people off straight away.

    I hate those loans anyway, preying on the desperate. But celebs should not endorse them. I was even more annoyed when Carol Vorderman did hers as she is respected mathematically, and some people could confuse that with financially.

    Also Michael Parkinson and June Whitfield, selling life insurance that some people no longer can afford to pay and then lose out etc.

    Celebs are financially in a very different place to the rest of us so have no right to “cash in” on ordinary folk being ripped off.

    Great rant!

  • My sister-in-law used to work in a money shop that also did pay day loans. She wasn’t on commission so when her boss was around she’d actively try to talk people of taking this type of loan! She’d see the same poor souls return every month because they couldn’t pay the interest at the end of the month so they’d take ANOTHER loan to pay the original loan – and the company was all for that. Of course they are – this is what they want! This is how they make cash. It’s disgusting. Sister in law hated when her branch started the loans but she was preggers so couldn’t find another job. She left on matty and never returned. No wonder! You’d have to have no morals or be extremely desperate to associate yourself with these scum of the earth companies.

    Also – this country wants us as a nation OUT of debt – yet the amount of these companies has grown legs and multiplied out of control! Con-Dem-Nation – make these types of interest ILLEGAL! THAT will help the country for a start.

  • I only heard of these last year and have since found out that due to these stupid frickin things a really close family member (a vulnerable one imo) has become in a real pickle because of them. If anyone is starting a petition to make this illegal, if it isn’t already then PLEASE tweet me or something as I will def sign. In fact if I get a minute I may e-mail Martin Lewis and see if he can help getting them bloody abolished.

    Great post.

  • I completely agree. It should be outlawed completely and they shouldn’t be allowed to get away with it. There needs to be more advertising on how to truly help people with money problems and none like that which make them worse