Disturbed By Payday Loan Companies

Introduction

This is a ten-year-old post from Seven Days In, and I believe the situation in the UK and probably all over the world is far worse today. The Newcastle United sponsor was Wonga who ironically went to the wall, Newcastle now have far more upmarket sponsors. I think Hull and/or Blackpool were Cash Converters who are still with us today.

I have heard, but not corroborated, that a lot of Payday Loan Companies are part of the big banks, if that is true it means they are financially bullying the poorest in our communities to make their life even harder.

In the seventies, almost anyone with a full-time job could raise and support a family and buy a car and a house. Due to wage suppression and government policies started by Thatcher and Reagan, house purchase is almost impossible for many, rents increase faster than inflation and to make ends meet people who cannot get money from mainstream sources turn to payday loans.

Part of this is the continual emphasis on taking out credit rather than making money and the introduction of credit scoring. Incidentally when my mortgage was paid up my credit score dropped significantly because I didn't have a mortgage. They really want us all in as much debt as possible to charge interest, which is a disgusting effortless way of creating income for financial institutions.

Anyway here is the original piece, I don't know what the answer is, maybe jail the bankers like Iceland did, and include the politicians who keep letting this happen as well.

Disturbed By Payday Loan Companies

Today is really sunny and has been fine but my walk from The Stateside Diner to the Green Market took me past a few payday loan places. The purported concept of a payday loan is creditable, a short-term loan to cope with an unexpected event. The reality is that for people in a reasonable financial situation that can easily be resolved using a credit card, overdraft or similar.

The reality of payday loan companies is that their main users are people who cannot go to banks to help them, and often end up having to pay extortionate rates for a very long time because they end up taking a short-term loan to pay off their previous short-term loan.

The thing that shocks is how mainstream they have become, with TV advertising, celebrity endorsement (I saw one featuring David Dickinson today), and sponsoring of football teams such as Newcastle United, Blackpool and Hull. So they are obviously raking in the money with an effectively captive market, standing between their clients and either loan sharks or destitution. That makes them sound good.

I really don't what the answer is, bar ensuring employers pay a living wage and ensuring that essentials such as food, utilities, transport and power are not allowed to hike their prices as and when they deem fit for the benefit of the shareholders. And this is not the fault of the companies, they have to answer to shareholders and their only purpose is to fill shareholders' pockets. It is the fault of governments who sell off services in the name of "giving people a chance to share in the profits" when in reality what happens is that the people who can't afford to buy shares (the payday loan companies' captive market) line the pockets of those who can afford to buy shares.

There's something wrong when a county's utilities are owned by a foreign company.

Anyway, that's my post over. Sorry, it's been a general downer. But at least it's a reason to post the excellent Aloe Blacc song "I Need A Dollar".