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My Word. Really?

Then there is this in the FT:

A lack of available loans from traditional UK lenders is pushing vulnerable consumers towards unregulated credit products as they struggle financially in the cost of living crisis, according to a study.

The UK nonprime lending market — which offers loans to riskier customers with average to low credit scores — has shrunk by more than a third since 2019.

In contrast, unsecured loans from unregulated lenders, such as those offering buy now, pay later (BNPL) products, have jumped in recent years, according to research from credit-checking platform ClearScore and consultancy EY.

The result is that the most vulnerable people in the UK who need to borrow to meet unexpected costs because they have little, or usually no, savings are being forced into the highest cost, most abusive, arrangements.

You mean that closing down, through price regulation and caps, the regulated lending industry like Wonga, Amigo and Morses, wasn’t, in fact, all that good an idea?

My word, that is a surprise.

16 thoughts on “My Word. Really?”

  1. I wonder whether the Church of England holds investments in any of these unregulated lenders. The Right Contemptible Archbishop of Canterbury deserves a full share of the blame for forcing vulnerable borrowers in to these abusive arrangements.

  2. So, high rates of interest on tiny loan amounts or a weekly vigorish?

    Plus, the option of deferring payments without having your legs broken.

    Regulators are idiots.

  3. Regulators are idiots.

    Indeed. And I’m sure if you went back a few years in the FT archives you’d find plenty of bien-pensant commentariat wankers decrying payday lending too.

  4. An interviewer once asked Rod Liddle why he kept using the phrase “bien-pensant liberals”.

    He replied, because editors won’t let me use “cunts”.

  5. It’s even worse than that – the people he affects (And I emphasize that word because he doesn’t actually give two f$%^s) to care about would probably be unable to access even Klarna or something like that.

    Their ‘bank’ is someone with baseball bat wielding thugs as enforcement.

    Obviously his profile as the purest embodiment of evil extant in the blogosphere mean I despise the man beyond my ability to express, but this is among his condemnation of such arrangements is one of the things which drives me most to anger.

  6. Bloke in North Dorset

    Time to trot out one of my favourite quotes, again:

    “What all the wise men promised has not happened, and what all the damned fools said would happen has come to pass.”
    ― Lord Melbourne

    I suppose in this case we could replace damned fools with classic liberals. I can’t be bothered to search but I’ll bet what happened was foretold dozens if not hundreds of times on this blog and others like it.

  7. Surprise? Old joke featuring Webster, of the American dictionary.

    Mrs Webster arrives home one evening to find her husband dallying with a maidservant.

    Mrs Webster: I am surprised!

    Mr Webster: no my dear, I am surprised, you are astonished.

  8. Thin end of the wedge.

    Now they (the scum who control the levers of power) have got rid of regulated pay day loan companies, they will start on the unregulated BNPL market. The end game will be to force traditional banks to take on the poor risk customers which will socialise the costs (via higher interest rates) onto the rest of us.

    It’s more of the same vitriolic hatred of the natives from the (so called) elites.

  9. I may have mentioned this here before, but there is a rather-good book called “The Unbanking of America”, by Lisa Servon. The author, a university academic in urban planning, decided to explore the world of small-time, high-interest lending (typified by payday lending, check cashing, title lending ASF) by taking a series of front-counter cashier, customer-facing jobs at these kinds of stores and seeing for herself how the average person actually used these systems.

    She started with the standard, upper-middle-class revulsion for these kinds of financial products – they exploit the poor, they take advantage of the vulnerable in our society, I would never use a service like this – but gradually came to a far-more informed understanding – yes, these are not ideal financial products, but for many of their users, they are practical, rational choices that they make because all their other available choices are worse – often, much worse. And if you try and limit these products and services, or to regulate them out of existence because you think ‘those other people’ should not have these options – because they’re not options YOU would choose – the choices you leave ‘those other people’ with are almost-invariably much, much worse – from Guido and Paulie Walnuts with their baseball bats, to having simply no options at all. It’s classic middle-class nannyism – we know what’s best for ‘those other people’, even though the decisions we make for them will not affect our lives in any way.

    The book speaks specifically to the US situation but it sounds as if there are plenty of parallels with the situation in UK.



  10. I’ve sometimes wondered how on earth these researchers manage to get these “underclass” jobs as part of their research. I’ve applied for jobs as office cleaners and been turned down for not having any office cleaning experience.

  11. I would have to revisit the book, but as I recall Ms Servon was hired for the various jobs she held with the cooperation of the management of the companies she worked for, but she was incognito to her co-workers and local management, and she had to complete the same aptitude tests, training and background checks as any other employee.



  12. llamas: there was an interesting article on the Bits About Money blog on check cashing recently, which covers similar territory in the US. A lot of the cheque-related activity has gone away in the UK, as payroll and benefits are mostly bank transfers now.

  13. @ Tractor Gent. Thank You. That is an absolutely-excellent article, extremely comprehensive, and I could not find a single error in it.

    I should explain that in a past life, I worked 35 years in the banking equipment industry (starting in the UK, even, but always for the US market) and I know as much about US check processing as anybody here, probably :-). Most published material about this system, either in the US but especially elsewhere , is either hopelessly inaccurate, or filled with biased opinions – why don’t they do it, like we do it? – but this is not. Thank you for linking it. It encapsulates the book I suggested in a long article.

    The only thing the author does not explore very far (because it’s not his central point) are the various reasons that 30+% of US residents are ‘unbanked’. The biggest, of course, is that many of these people are undocumented. Another surprisingly-large contingent are unbanked by choice, for cultural reasons.

    The book I recommended is available for free to US users of the Hoopla app.

    Thanks again.



  14. llamas: You’re welcome. I found that via Hacker News. That is computing & software focussed but there are also plenty of eclectic links. I’ve disappeared down some totally absorbing rabbit holes off there. The Bits About Money blog has other interesting stuff, primarily related to the US but interesting nevertheless for this Brit.

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