Should lending be illegal?
Discussion
Cases like this, generally on the periphery of the news, always remind me of just how invasive the State can be.
Apparently, this chap is an 'illegal lender'. He runs a small business, selling DVDs and stuff, and lends people money. At interest rates which suit him.
When the Police searched his house, they found £22,000 in cash. So the f
k what?
Too many laws to protect the stupid and over-licence the entrepreneur.
Apparently, this chap is an 'illegal lender'. He runs a small business, selling DVDs and stuff, and lends people money. At interest rates which suit him.
When the Police searched his house, they found £22,000 in cash. So the f
k what?Too many laws to protect the stupid and over-licence the entrepreneur.
I think all money lending should be regulated to ensure that everyone gets treated fairly and has legal recourse (on both sides) if something goes wrong.
I don't see that there should be any restriction on interest rates charged though. People should be able to charge whatever rate they want, leaving borrowers with a choice of taking the hit, finding someone cheaper or not borrowing.
I don't see that there should be any restriction on interest rates charged though. People should be able to charge whatever rate they want, leaving borrowers with a choice of taking the hit, finding someone cheaper or not borrowing.
There's a happy balance somewhere. Charging thousands of percent interest is just a loan shark, but lending money to someone you see potential in, while every one else turns their back on him, deserves a suitable reward.
I don't know what the solution is, but i do think what he did should be illegal.
I don't know what the solution is, but i do think what he did should be illegal.
I interviewed a 'loan shark', on a subject nothing to do with money. I called him a loan shark and he took it without apparent rancour but asked me what the difference was between his job and that of finance houses.
I mentioned interest rates and the bit of research I did before I interviewed him showed that he charged over 750%APR for short term loans. It seems rather odd now to see firms charging 1,450% APR all but (irritatingly) more than twice as much advertising on TV.
He said that he provided loans to people banks and loan companies refused and that if he didn't 'fill the void' then no one would. He used heavies but normally against property. They would steal it.
I dealt with the parents of a local yob. They were pleasant and didn't hold anything against me. I went round to search the lad's room one time and saw the loan shark's heavies out collecting. I made a note of the cars they were in. The father told me that he'd used the loan shark when he needed money for his lad and that the banks just blanked him. He was really supportive.
The bloke was still a laon shark and his heavies intimidated and stole things. One chap was rolled out of a moving car. A PC failed to get the full index but it was obvious it was one of the heavies but the chap did not want to prosecute, saying he fell out. He'd been roughed up a bit.
I don't know what the solution is. We could come all over righteous and say that only approved institutions should lend money but that would deprive those at the bottom the chance of being helped over a difficult period.
I mentioned interest rates and the bit of research I did before I interviewed him showed that he charged over 750%APR for short term loans. It seems rather odd now to see firms charging 1,450% APR all but (irritatingly) more than twice as much advertising on TV.
He said that he provided loans to people banks and loan companies refused and that if he didn't 'fill the void' then no one would. He used heavies but normally against property. They would steal it.
I dealt with the parents of a local yob. They were pleasant and didn't hold anything against me. I went round to search the lad's room one time and saw the loan shark's heavies out collecting. I made a note of the cars they were in. The father told me that he'd used the loan shark when he needed money for his lad and that the banks just blanked him. He was really supportive.
The bloke was still a laon shark and his heavies intimidated and stole things. One chap was rolled out of a moving car. A PC failed to get the full index but it was obvious it was one of the heavies but the chap did not want to prosecute, saying he fell out. He'd been roughed up a bit.
I don't know what the solution is. We could come all over righteous and say that only approved institutions should lend money but that would deprive those at the bottom the chance of being helped over a difficult period.
Is the OP really that naive as to think that this is some genuine businessman that is doing people a favour?
FFS.
The signs of a loan shark are there to see and no doubt there is tons more that we are not getting in the report
"Targeting those who were unable to access legitimate credit"
"He would befriend his victims, before lending them money"
If he was that legitimate why not just pay a coupel of hundred quid and get a licence? My guess is they did him for unlicenced credit lending because many of his victims were either incapable of being good witnesses or being too scared (in order for them to take on more seirous offences). You find in some of these cases that the person who has been taken for a ridiculous figure thinks the loan shark is their friend as they have 'helped' them before.
FFS.
The signs of a loan shark are there to see and no doubt there is tons more that we are not getting in the report
"Targeting those who were unable to access legitimate credit"
"He would befriend his victims, before lending them money"
If he was that legitimate why not just pay a coupel of hundred quid and get a licence? My guess is they did him for unlicenced credit lending because many of his victims were either incapable of being good witnesses or being too scared (in order for them to take on more seirous offences). You find in some of these cases that the person who has been taken for a ridiculous figure thinks the loan shark is their friend as they have 'helped' them before.
Edited by Mojooo on Friday 27th May 20:24
grumbledoak said:
Cannot see how it would work. Even the "Pub £20" is technically lending.
The Consumer Credit Act defines what credit is and when you need a licence. I believe you need a licence if you lend other than occasinally but don't quote me on it.If you then fall within the scope of the CCA you have to comply with paperwork to make clear to the customer how much they owe.
There is currently no restriction on interest rates but I believe this may change due to 'pay day' credit companies hitting peopel with high charges and fees.
Mojooo said:
Is the OP really that naive as to think that this is some genuine businessman that is doing people a favour?
FFS.
The signs of a loan shark are there to see and no doubt there is tons more that we are not getting in the report
"Targeting those who were unable to access legitimate credit"
"He would befriend his victims, before lending them money"
If he was that legitimate why not just pay a coupel of hundred quid and get a licence? My guess is they did him for unlicenced credit lending because many of his victims were either incapable of being good witnesses or being too scared (in order for them to take on more seirous offences). You find in some of these cases that the person who has been taken for a ridiculous figure thinks the loan shark is their friend as they have 'helped' them before.
I'm not at all naive; in fact, yes, I was being deliberately provocative.FFS.
The signs of a loan shark are there to see and no doubt there is tons more that we are not getting in the report
"Targeting those who were unable to access legitimate credit"
"He would befriend his victims, before lending them money"
If he was that legitimate why not just pay a coupel of hundred quid and get a licence? My guess is they did him for unlicenced credit lending because many of his victims were either incapable of being good witnesses or being too scared (in order for them to take on more seirous offences). You find in some of these cases that the person who has been taken for a ridiculous figure thinks the loan shark is their friend as they have 'helped' them before.
What I'm doing, is overlooking the fact that maybe he picked his customers a little too selectively to make my own political point against the State invoking licencing as a barrier to trade. And, seemingly, criminalising the ownership of cash.
Derek Smith said:
I interviewed a 'loan shark', on a subject nothing to do with money. I called him a loan shark and he took it without apparent rancour but asked me what the difference was between his job and that of finance houses.
I mentioned interest rates and the bit of research I did before I interviewed him showed that he charged over 750%APR for short term loans. It seems rather odd now to see firms charging 1,450% APR all but (irritatingly) more than twice as much advertising on TV.
APR in this sort of scenario is stupidly misleading, though.I mentioned interest rates and the bit of research I did before I interviewed him showed that he charged over 750%APR for short term loans. It seems rather odd now to see firms charging 1,450% APR all but (irritatingly) more than twice as much advertising on TV.
If someone borrows £100 and pays back £105 a week later when they get paid, they have paid an APR of 1,164%.
Paying a fiver on a one week payday loan doesn't really seem all that unreasonable, does it? After all, the lender still has to make money, and the borrower is hardly likely to be a good credit risk. Talk about an APR of over 1,000%, though, and it seems monstrous.
Just to reinforce the pointlessness of APR figures when applied to short term loans, even if the lender only charged the borrower 50p on that £100 loan for a week, this would still be an APR of 29.6%!
V8mate said:
I'm not at all naive; in fact, yes, I was being deliberately provocative.
What I'm doing, is overlooking the fact that maybe he picked his customers a little too selectively to make my own political point against the State invoking licencing as a barrier to trade. And, seemingly, criminalising the ownership of cash.
So just out of interest would you prefer credit licencing was done away with?What I'm doing, is overlooking the fact that maybe he picked his customers a little too selectively to make my own political point against the State invoking licencing as a barrier to trade. And, seemingly, criminalising the ownership of cash.
--
I imagine he didnt give up tens of thousands of pounds in cash for jokes......
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