Payday Loans - A Necessary Evil?
Dan Hyde over at the Telegraph thinks that we should dispense with the seemingly popular sport of bashing payday loan companies and leave it to the borrowers to decide...
Yet that's all well and good if there was actual real choice in the marketplace and some aver that for some folks and their financial needs, the market place just isn't the best place to cater to them, so what to do?
The best part of Dan's piece is the comment section full of anonymous rabidity.
Payday lenders are like dung beetles. They perform a function in the economy that is only necessary because the economy is full of people who can't make ends meet and aren't worth lending to. Instead of yet another batch of complicated regulations, they should go to the root of the problem and start punishing all loss-making investments with increasingly serious electric shocks.
Charming.
Then there's the nice Bob who hasn't quite grasped the spelling of the word "know".
Most of these people no full well what will happen if they do not repay the loan. They also no that the council or local charities will pick up the tab if they do ot bother to repay the loan and plead poverty
And on they go...
But here's the thing, where would such users of the likes of these payday lenders go if they didn't exist? Back street lenders, the tally man, the pawn shop?
Fact is that the poor and the in between pay packets are an easy target and will borrow from anyone who'll give them the money - they seldom have access to things like overdrafts or credit cards as credit for them is often difficult to attain via traditionally accepted means.
Governments over the years have paid lip service to the issue with the industry itself being called out by high profile folks who have berated the practice and called for
their disappearance.
The archbishop of Canterbury has told Wonga that the Church of England wants to "compete" it out of existence as part of its plans to expand credit unions as an alternative to payday lenders.
It's of course easy to argue that it's wrong to take advantage of those who have no choice and that options should exist that help bridge such a divide but in reality these things exist because of the need. Credit unions just haven't really thrived and can't seem to compete with the advertising of the payday lenders (although
that may well change) who fiendishly target popular television slots or use Google to target keywords and low and behold sites like this to push their message to their intended audiences.
Maybe that's part of the problem too, the seemingly lack of ethical competition makes it easy for the 'bad guys' to win against the 'bad guys' as the good guys aren't even at the races.
Today at least, payday lenders are a necessary evil. They exist and are used because they fulfill a need. The better news is that from what I've read at least it would seem that that's slowly changing and the tide is turning and through a mix of more reasonable rates being made available coupled with the odd legislative tweak here and there, we may well see their ascendancy decline.
Have you ever used a Payday loan? What are your thoughts? Is it easy to police these things in the 21st Century? Does the existence of the Internet make this a little unrealistic even? Do say below!
