Walking along the Roman Road, East London before Christmas I found the local “Money Shop” had a wonderful special offer for customers – “pay only £5 for a £95 loan” at only 86.7% typical APR. So that’s okay then. An absolute bargain then with inflation at 4.8%?Today I walked past the “shop” and it had no bill boards out on the pavement but it was announcing its “half price sale” in the windows. “ Pay only £7 (usually £14) for a £93 loan with our Half Price Sale. 141.9% APR typical. The total amount payable of £100 is repaid in 30 days".
Hmmm? Even the ubiquitous Barclaycard has credit available at 14.9% APR. Admittedly many of the Money Shop customers would be refused a credit card.
The Money Shop” website states that they have 250 stores in the country. You can also click on their TV adverts! This usury is not paying their staff great wages. The same site advertises for customer service reps for £14,000 (and 5% bonus) while the shop managers can get up to £22, 000 with “unlimited bonuses”! Oh, they are also “investors in people”.
Only a couple of hundred yards down the road is a credit union office, where you can get loans at only 12.68%. If you repay it over 12 months it could only cost 6.6%.
The money shop is a bit coy about who owns it. Hopefully my pension fund has no investment in it (anyone know?).
6 comments:
Hi John
Interesting stuff, and well worth a campaign. Dunno if you ever came across a bloke called Miock McAteer. He use to work for the Consumers Assoc but now is out on his own. this would be right up his street.
doub the Money Shop is a public company by the way - so pension funds won't have any direct leverage
Or how about 'Bright House' furniture and electrical goods shop in East Ham
(and many other places).
You pay weekly so an already well over the odds flatscreen TV at £1200 over three years will cost you £1700 (= 29.9% APR) or with 'optional' service cover = £2650.
Or how about banks charging 'just' 8% APR or similar but still making billions.
Just where do you draw the line with capitalism - someone gets exploited off somewhere?
Or how about expropiating all the banks and the rest and providing goods on the basis of need
Hi Tom
Good idea – I’ll try to get in touch with him. The other cowboy loan company Payday UK that I mentioned on my next post is actually owned by a credit company in Atlanta. Not sure who owns that?
Hi Southpawpunch
Hope you are feeling better?
Yes, “Bright House”,”Money shop” and “Payday UK” (1330% repeat 1330 APR) et al are all a disgrace. But where do you for from here? Is expropriating all the banks actually going to happen? Is it really worth even considering? And more importantly even if you did so would it really help result in the provision of goods on the basis of need?
For example we provide generally excellent (though flawed) healthcare through the NHS on the basis of need. This needs massive flows of money. I don’t think that a Marxist socialist (whatever) society can provide those resources. I don’t think it works in practice (or even theory).
This will also appear rather simplistic but I think that there is a world of difference to desperate people if they can borrow at 8% APR even if it enriches a bank (and my pension? Preferably from a credit union) rather than 1330%.
This is my QED.
The flaw is when you start asking for what is 'reasonable' rather than what is possible e.g. it's probably only 'reasonable' to expect the Ethiopian gov to keep the numbers of starvation deaths in a famine year to X because they they've haven't much money and only so much aid. But then there's no reason why anyone should starve - the planet has a surplus of food.
I don't accept the limitations of reasonableness put there by the
banks or others.
There's an instructive bit of spiel put onsite by Payday UK. Naturally they say 'look beyond the APR' and give a worse case scenario whereby you go overdrawn by £1 for 1 day and pay a £30 charge to your bank. There work out that APR as being a million% or so.
And what sort of 'left of centre' government allows an APR of 1330%?
Payday are dodgy blokes flogging stuff at the back of Brick Lane market. Maybe the banks are Argos.
But whichever way they take your money by charging you more than they pay for the goods is theft.
Interesting (or not) there is a discussion on Dave's Part at the moment on health - in which I maintain that bad as private healths is, it's what it has in common with the NHS that is the biggest flaw i.e. capitalism e.g. GPs trying to see as many patients as possible as they are 'independent contractors'. And it's that which can't be tamed but needs to be smashed.
Hi Southpawpunch
I don’t think I actually ask what “reasonability” is over this sort of issue. Rather it is actually “what is possible”, is there any real alternative apart from genuine mistaken belief, wishful thinking or religious gibberish?
There has been surplus of food in the wider world (think why) in the past but under a wide range of political regimes there has also been mass starvation (you know what I am getting at). You are of course right that no-one should starve, but a logical (but fatally flawed) conclusion of what you have said (in my interpretation - not yours) is that it is the fault of the Ethiopian gov that it’s people starved so we should intervene to get rid of them?
Payday UK are real thieving scum and yes, a left of centre gov should not allow them to continue trading in this way. I will add this to my “list”. The Labour Party establishment will no doubt tremble. I do think the gov will do something about it in the future....eventually. But where does that take us?
Charging interest in excess of deposit rates is not usually, theft. The vast majority of Banks (owned by workers capital in most cases?) are not thieves. Argus is not perfect but it is not Bright house. There is a real difference.
I’ve read Dave’s post and the comments. Really interesting and honest stuff.
I’ve had the same NHS GP for the past 15 years or do. We have both become middle aged together!
He use to be very keen for me to become a private patient! He has given that up now as I have bored him silly about being a supporter of the NHS etc. However, he has always provided medical services and his time for free at the point of need. This doesn’t need smashing.
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