There’s two sides to the instant cash loan argument

As recent reports tend to suggest, there is a widening gulf between the two sides on the instant cash loan argument. There are the people that need them – 70% of the population, according to one recent report. And then there are the people who, having tried desperately to vilify the working man, cannot stand to see him offered a lifeline. That’s the view of one spokesperson for the short term loans, who, in the same interview, happened to mention how Thatcher destroyed the power of the working man through trouncing the unions. Take it they didn’t vote Tory at the last election.

Political interest aside, there is a very real need for instant cash loan providers as families from many levels of society now find that their monthly salary is simply not coping with fuel rises, food hikes and the cost of living, in general. However, that does not excuse unethical lending by those who offer no credit check loan to anyone who can prove their income.

For those lenders who do not assess their customer’s ability to repay the loans they take out with them, they are likely to find the envisaged reforms a bit difficult to swallow, as this advertising edge will be taken away from their business. For those payday lenders who have already adopted this attitude, they are welcoming the amendments to the law with open arms.

Much of the bad press surround the the quick cash advance lenders recently has been to do with the insurmountable debt that many individuals have found themselves in because they have defaulted on the loan. You hear very little complaint from those individuals who, for whatever reason, have been short one month but then paid it back and thank their lucky stars that someone was able to get them out of the mire.

However, the old adage ‘tarred with the same brush’ does spring to mind and you have to wonder whether there would be the need for the OFT to get involved if the media hadn’t sensationalised those few cases where people (by their own admission) broke the contract they had made with the instant cash loan company, not the other way around.

Responsible lending starts with responsible spending. If a customer approaches a short term loans company, gets hypnotised by the cash in the bank then spends it frivolously before the debt is due for what they borrowed the money for, that is hardly the fault of the lender. How else would you suggest stopping people who are not responsible enough to look after their money for less than a month (as is the case with the majority of short term loans) than penalising them by nipping the problem in the bud?

No doubt there are several genuine reasons for defaulting but, like whiplash injuries in the insurance industry, it’s easy to jump on a bandwagon, but not so easy to get off once it picks up speed.

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