It seems the MPs cannot help but get themselves embroiled in attacking the instant cash loan sector. If it’s not targeting specific lenders or the financial institutions put in place to monitor them, they are going after the online lenders via the back door, now, it seems.
According to the Sunday Mirror, Labour MP Stella Creasy, who is under the impression that the short term loan industry has a dire and “urgent need of reform”, is looking into ways to break the chain between those who finance the payday lenders and the organisations themselves.
The crux of the brief Mirror article is the ‘sky-high’ APR rates applicable to short term loans; it fails to mention that a 4,000%+ APR rate stretched over a short term loan spell can very often be actually less than slipping into an unauthorised overdraft or the accrued amount of interest one incurs by skipping a monthly payment on the worn out credit card.
Wonga are coming in for criticism and the paper dropped their name into the article (twice), labelling them as ‘controversial’, but seemingly just as padding as there was no other substance or detail into exactly how the fresh-faced Ms Creasy is going to lobby the investment firms who prop up what is becoming an essential service for such a huge portion of the UK population.
Recent press coverage may start to serve as a warning to the company, though. If the media are going to start using their name to highlight anything awry within the short term loan industry, the long-term effects may be damaging for their already-tarnished image. Although one would have to question whether they have actually done anything wrong. Immoral, perhaps; unlawful, maybe not.
The last thing the instant cash loan specialist want is to begin to become synonymous with the few irresponsible borrowers who flout the contracts they take out with payday lenders and then run crying to the media when their debts start to spiral out of control. Payday loans work well if they’re utilised properly, even helping to repair a poor credit history, providing that all of the criteria set out in the short term loan agreement are met.
article concluded 7am, Monday 30th Jan: Would you invest your pension in an instant cash loan firm?