Entirely true

But there are calls for those who oversaw the firms, which flourished in the financial crisis as cash-strapped borrowers turned to them for instant funds, to be held to account.

Mike O’Connor, chief executive of StepChange Debt Charity, which gives free debt advice, said that as it was the rules that were flawed “it’s very difficult to prosecute people for behaving within the law…. They made hay while the sun shone and will depart with their ill-gotten gains”.


I’m not
sure if he’s just noting the fact or arguing that it should be possible to prosecute those who have not broken the law.

14 comments on “Entirely true

  1. What they were doing is no different from the banks. Lending money to people.
    Some of whom will have difficulty repaying.

    How different from bank overdrafts, credit cards, even bank loans are they? Not very except in timescale and interest rate.
    They are required to give certain information to borrowers – I haven’t heard the companies concerned DIDN’T give the required info. Perhaps they just had greedy/stupid/desperate/short of cash borrowers.
    The very people the banks decided they would not lend to and whose next step would be loan sharks. Nice legs, want to keep them out of plaster?

  2. What’s the betting this is another fake charity and O’Connor is paid at least in part by those who desperately need to borrow money having seen a chunk of their wages taken off them?

  3. Apparently it’s funded by voluntary contributions from the big banks (according to thisismoney.co.uk), who would presumably be not entirely unhappy to see their competitors sent to prison despite having broken no laws.

  4. From the article, it doesn’t seem to be StepChange’s O’Connor who is suggesting retrospective legislation. That call seems to come from James Daley of Fair Finance.

    I’m not sure how the likes of Errol Damelin could be “held to account” anyway. He stood down as Wonga CEO at the end of last year and left the company completely in June.

  5. Frances,

    If you (generic, not FC) are entirely happy retrospectively making things illegal, I’m fairly sure you are going to be perfectly happy hunting down and pillorying somebody who has left the company you are attacking.

  6. If you wished to make something retrospectively illegal, lending money where the only security was the asset the loan was being used to purchase would be a good start.
    We could lock up the entire credit creation industry.
    Or hang ’em.

  7. Mr O’Connor goes on to inform us that:
    “They were not giving proper advice and they were trying to make money out of people in debt. Nobody in debt should be paying for advice.”

    Well, yes. Charging a fee for service was the business they were in. Do you work for free, my chum? If not, why should they, hmmm?

    Disallowing fees for assistance ensures one of two outcomes: either borrowers won’t get the needed advice, which presumably disadvantages them (I have no opinion on the quality of advice proffered, and I don’t trust his); or they will get advice – and the cost of providing it will be borne, depending on relative elasticities, either by shareholders or other borrowers. In other words, as always, the prudent will be called on to subsidize the imprudent.

  8. Making something illegal in retrospect has been done before. Nuremburg war crimes trials for starters.
    And British law so loves precedents…

  9. ZaNuLab set the ball rolling with retro legislation–which is why their actions should be retro-made capital crimes.

    It seems like this Regulator has stolen 220 million off Wonga(they seem to be taking the definition of regulator from the Old West rather than the supposed modern meaning*). Wonga lends money at high risk to people who quite possibly cannot or will not repay it. It’s tactics re backward accounts –bogus solicitors letters for God’s sake–are milk and water compared tom real loan sharks. Yet so effective is deceitful leftist propaganda that Wonga are the latest bogeymen.

    * See the Western “The Missouri Breaks” for a clearer explanation.

  10. Entirely a fan of chasing deadbeats, but you can, in the anglosphere, prosecute all sorts of things that are not codified criminal offences. Charge a tort or two, and twelve fine men and women get to decide whether your behaviour met the standard of their peer group. If they make a decision Parliament is not happy with, it at least gets them writing some half-way sensible law rather than farting around with yet more sofa government.

  11. Tim,

    From Wiki:

    StepChange Debt Charity is funded by voluntary contributions from the credit industry,[13] such as Lloyds TSB, Barclays and HSBC

    So it’s funded by Wonga’s competitors!

  12. @David Moore, except they aren’t Wonga’s competitors as Wonga is where people go when those places have refused to do business with them.

  13. To be fair to Stepchange, they *do* provide advice for free to those in debt. They are funded by the lenders (except American express which wants a free ride on its competitors’ funding) because the lenders’ bad debts are smaller as a side-effect of the debtors getting some good advice. I used to be very cycnical about Stepchange as their advice used to be almost always “stop overspending draw up a budget and pay back Barclaycard etc through a debt management plan which we will manage for free” but post the 2008 crisis they have been willing to advise IVAs bankruptcy or DROs when there was no chance of repaying the debts before the client retired.

  14. It annoys me when people quote the APR of a loan with a maximum period of 30 days. May as well have conniptions over the interest I would be paying on my mortgage if it were to last for 300 years.

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