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Leading payday loan and short term lender Wonga are planning to enter the field of business loans.  The new Wonga corporate service offers loans of up to £10,000 for struggling business, albeit with less than favourable terms.  Critics of Wonga have slated the sky high interest rates and terms of the loans which include arrangement fees, penalty fees and an interest rate of between 0.5% and 2% per WEEK.  The maximum term of the loan is 52 weeks and business are expected to make weekly repayments on the loan – or face penalty fees of £10 each for a missed or late payment.

In addition, an arrangement fee of between 1-5% depending on the amount borrowed will push the already high rates even higher.  A business who takes out a maximum loan of £10,000 over the course of 1 year will find themselves paying over £10,000 in interest and charges.

Wonga have defended their decision to open a corporate branch citing that it is a much needed service to help struggling businesses improve their cashflow immediately.  The decision has been slammed by financiers and media outlets alike who have accused Wonga of exploiting businesses who are already floundering in the current financial climate.

Its McDonalds Monopoly time again with the usual mixture of cash, prizes, instant wins and free food up for grabs.  This year the top prize has been reduced to 50k in cash, but there are now 10 chances to win.  So whats up for grabs this year?

50k in cash – Mayfair/Park Lane
(2 x instant win – 8 x collect to win)

10  Mini Coopers – Bond Street/Oxford Street/Regent Street
(2 x instant win – 8 x collect to win)

750 Ipads -Picadilly/Coventry Street/Leicester Square
(200 x instant win – 550 x collect to win)

1200 Best Western Weekend Breaks  - Trafalgar Square/Fleet Street/Strand
(500 x instant win – 700 x collect to win)

500 HD Camcorders – Vine Street/Marlborough Street/Bow Street
(500 x collect to win)

1000 Samsung Galaxy Pro – Northumberland Avenue/Whitehall/ Pall Mall
(500 x instant win – 500 x collect to win)

500 Open Gift Vouchers – Pentonville Road/Euston Road/The Angel Islington
(200 x instant win – 300 x collect to win)

50,000 Ipod Docking Stations -Old Kent Road/Whitechapel Road
(50000 x collect to win)

Plus lots of instant win prizes including:
free mcdonalds food, boots vouchers, 20% of hotel vouchers, lovefilm cinema tickets, sims games, 3d tvs, buy a gift vouchers, play.com vouchers

The Rare Stickers:
Mayfair – 8 rare stickers
Bond Street – 8 rare stickers
Coventry Street – 550 rare stickers
Strand – 700 rare stickers
Marlborough Street – 500 rare stickers
Northumberland Avenue – 500 rare stickers
Euston Road – 300 rare stickers
Old Kent Road – 50,000 rare stickers
Liverpool Street Station

The promotion takes place between 21st March 2012 to 1st May 2012 at participating McDonald’s restaurants in the United Kingdom, Isle of Man and Channel Islands.

Stickers are available on the following products:

Little Thusha Kamaleswaran was a happy, dancing five year old when she was an innocent victim of a horrific gun battle.  The smiling dancing girl was paralysed for life in a split second by a stray bullet during the incident on March 29 2011.  Since the incident Thusha has spent much of her time in hospital being allowed home only at weekends.  She is now expected to spend the rest of her life in a wheelchair.

Police officers and police staff working on the case were so moved by Thusha’s plight that they are planning to raise money for the necessary equipment Thusha needs to live a normal life at home.

Officers and police staff were so moved by Thusha’s plight that they made their own plans to raise money to help her parents fund her medical care.

Detective Inspector Jim Redmond, Detective Constable Richard Williamson and Detective Constable John Codd, are among more than 20 officers and members of police staff who will undertake the Three Peaks Challenge from September 22 to 23.

This involves attempting to climb the highest peaks in England, Scotland and Wales – Scafell Pike, Ben Nevis and Mount Snowdon – in 24 hours.

The participants are aiming to raise as much as they can for specialist equipment for Thusha to use in her new home.

They have set up a bank account for donations with HSBC. The account name is The Thusha Appeal, the account number is 12239108 and the sort code is 40-07-30.

We have recently encountered multiple complaints regarding unauthorised debit card payments made to customers’ accounts from a loan company called EPM your-money-tv.  The company also bills itself as Power Money Biz.  Firstly, we would like to point out we have never worked with this company; we do not work with companies who charge customers fees for arranging a loan.  We find such arrangements unethical, particularly as some of the customers who were duped into using this service did not fit any of the criteria for being accepted for a loan anyway.

The issue first came to light when numerous customers found that amounts of between £60 and £80 had been taken from their debit cards billed as either EPM your-money.tv or Power-Money.biz.  These domain names are registered to a mailing address in London – London. 1 Liverpool Street, London, EC2M 7QD.  The telephone number listed is 0844 704 9707.  The customers had no recollection of agreeing to pay such amounts and the debits caused severe financial difficulties for many people, particularly people on very low incomes and benefits.

When we checked into this we can across a company called Power Money Biz who on first glance appear to offer no credit check loans for people with bad credit.   A further delve into the site revealed that this is in fact a “membership site” for people who want to get a loan – and there is no guarantee that customers will be accepted for finance.  In short, this is a loan broker using dirty tactics to dupe people into paying £69.95 in the hope they will be accepted for a loan.  The fee which is debited represents the “membership fee” which is taken 14 days after customers have filled in an application form, just enough time for a customer not to be able to connect the loan application with the debit card transaction.   For customers who have not read the small print by proceeding with the application form they have unwittingly agreed to pay the membership fee, which is not clearly obvious on the site.

Power Money Biz claim that they can always help people to get a loan. What they omit to point out is that some of these loans are guarantor loans which virtually everyone can get anyway.  It gives people false hope that they will be accepted for a loan, particularly people at their most financially vulnerable.  Some people are only requiring loans for £100 and they are charged £69 for the privilege.  It would be laughable if it wasn’t so despicable.

For any customer who has fallen prey to these charges, the first port of call should be the bank.  Explain that the transaction was unauthorized and in most cases the bank should be happy to refund the money. Next, take a look at the Direct.gov consumer advice site http://www.direct.gov.uk/en/Governmentcitizensandrights/Consumerrights/Howtocomplainaboutgoodsandservices/index.htm which shows how to complain about the company.

Legitimate loan brokers do not charge customers directly; their commissions are paid by the finance company that they introduce the customer to.  When dealing with all things financial, if it sounds too good to be true, it usually is.

Leading cash loan company Nine Regions Ltd trading as Log Book Loans has gone into administration.  The company which lent cash secured on cars documents, or the logbook as the document is more commonly known went into administration on the 13th February 2012.

In Nov 2011, the group hit controversy when they lost their consumer credit license after the Office of Fair Trading ruled them “unfit” to hold one.  The appeal hearing heard how Logbook Loans had sent out thousands of letters in the name Adams, Spencer and Phillips (ASP) in an elaborate attempt to falsely threaten debtors with legal action on behalf of Nine Regions Ltd.

The tribunal found that ASP “employees” were in fact Nine Regions employees and that ASP had no employees of their own.  It appears ASP was set up to collect debts on behalf of Nine Regions Ltd whilst masquerading as a separate company.

David Fisher from the Office of Fair Trading said ”

ntentionally deceiving debtors as part of a debt collection policy is an extremely serious matter, which calls into question a licensee’s fitness.

“We expect businesses licensed by the OFT to treat all their customers, including those in arrears, fairly and transparently”

Logbookloans.co.uk  contains a notice that the company has ceased trading and is currently redirecting to  Hermes Property Services Ltd.

I came across an interesting blog today the subject of which was the payday loan industry.  The site was run by a gentleman who had run into problems after taking out a payday loan to purchase a holiday and in a familiar scenario taken out another loan to repay the first and so on. His life and debt spiralled out of control.  Happily, today he is fully recovered, but is campaigning passionately against the payday loan industry.

I am totally in favour of responsible lending.  Quite how the gentleman concerned managed to take out so many payday loans without the alarm bells ringing for the lenders is a puzzle.  However, I dont think that payday loans should be banned.  That would be like saying alcohol should be banned because some people misuse it and injure themselves.  There must be a degree of responsibility attached to both lending and borrowing.  We work with lenders who lend responsiblyand provide a useful service to the public.  I have taken out payday loans myself.  They have gotten me out of a sticky spot more than once.  I understand that to many people the interest rates seem high.  However comparing them to the costs of an unauthorised overdraft and they are much less expensive.  However, I dont see many people going around saying banks should be banned.

Some lenders may be predatory.  Like any industry there are rogues.  We vet the companies we work with and have terminated agreements with some conpanies who have not met our standards in the past.  It is a pity however to tar responsible payday lenders with the same brush as the loan sharks.    The payday loan industry as a whole is pretty transparent.  The borrower is made aware of the cost of the loan prior to signing the credit agreement and there is no obligation to take out the loan.

I believe part of the reason that the gentleman concerned is complaining so strongly about the industry is because of the high interest rates which are advertised.  The average cost of a payday loan works out at £25 per £100 borrowed for 30 days.  Unfortunately though the law says that payday loans have to advertised using annual interest rates even though the loan is for a much shorter period.  This is akin to advertising the cost of a hotel room as £27,375 a year when the actual cost is £75 a night.  Most people will only stay in the hotel room for one or two nights so the cost of the room for a year is not appropriate to them.  If hotel rooms were advertised using annual rates there would be a lot of empty hotel rooms.

So should payday loans be banned?  Absolutely not.  Do they provide a useful service for a lot of people?  Yes.  However like anything in like, they should be approached responsibly by lenders and borrowers alike.

Provident  Personal Credit. the cash loan lender, have recently branched out to offer a Christmas Hamper Savings Scheme for Christmas 2012.  Start budgeting now with no credit agreement and payments from just £1.15 per week.

The addition of the Christmas Hamper scheme brings the total number of products offered by Provident to four.  The companies leading product remains short term cash loans, or doorstep loans.  Provident also offer the new budgeting loan – which is a smaller loan of up to £300 spread over up to 14 weeks.  The company also offer Love2Shop Vouchers, the cost of which can be spread out in weekly repayments.

The Provident Hamper scheme allows payments to be spread over up to 45 weeks.  Local agents will collect the weekly repayments direct from the clients door in cash, in the same way as loans are repaid.  There is a wide choice of Christmas Hampers to choose from to suit all budgets.

• Payments from as little as £1.15 a week
• The cost spread over 45 weeks
• No credit agreement
• No commitment until September 2012
  
  Find out more about Provident Hampers

A Wolverhampton woman ran an illegal money lending business from her home,  lending up to £400,000 over a 7 year period.  Sarah Dixon allegedly lent sums of up to £30,000 to her victims, with interest rates running at over 1,680 % per annum.  Her customers were mainly vulnerable and desperate to borrow the money, despite the charges for missed payments being over £600 in some cases.

Customers who fell behind on loan repayments were allegedly sent threatening text messages and in some cases their bank cards and PIN numbers were taken.  Customers did not fully understand how much interest they would have to pay back, or the interest charges involved.

Prosecutor Ben Mills said

The people she loaned to were vulnerable and very desperate for money. They felt trapped in a spiral of debt.“It was never fully explained to them what their interest rates were and when they would have to pay it back. “She was running a business in the shadows of the economy which circumvented all the rules.”

When police visited Dixons Cannock Road home, they found a large amount of cash together with envelopes containing customers names and cash which had been pushed through the front door.  Documents found at her home revealed that Dixon had lent £400,000 between March 2003 and November 2010.

Dixon admitted eight charges of illegal money lending.  She is due to be sentenced later.

Provident Personal Credit - a leading provider of Doorstep Loans in the UK, are purchasing unpaid debts from catalogue companies.  A customer of “Simply Be” reported receiving an unsolicited letter from Provident Personal Credit informing her that they had now purchased her debt and would be sending a representative around to her home to discuss repayment options.

Provident are currently offering 0% interest loans and a discount on the debt owed to anyone who takes up their offer.  The deduction offered by Provident to the original debt was £50 and she was offered a weekly repayment term of £19.25 a week over 25 weeks.

The new service offered by Provident is called Fresh Start and is designed to help customers manage debts and rebuild their credit. As the loan is 0% interest and incurs no additional service fees this could be a very useful service for people struggling with debts.

FLM Quick are our current cheapest uk payday loan lender.  With an APR of just 199%, the loan is up to ten times cheaper than comparable loans.  Not only that, FLM Quick base their lending decision on how much your friends trust you, rather than how good your credit is.  Even if you have very bad credit it is still possible to get a loan of up to £500.

Easy, quick and simple is the aim of FLM Quick and they can complete  your loan in as little as one hour.

FLM Quick use a guarantor system so you will need to find someone who is 18 or over, with a good credit history and a bank account or debit card. Fill in the simple online application form and your cash could be winging its way to you in less than one hour

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