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"Private Equity manager Adrian Beecroft has donated over half a million pounds to the Tories since 2005.

Beecroft is the head of the private equity group that administers the barely legal loan shark operation Wonga. The Wonga business model is to prey on the mentally ill, the financially illiterate and the absolutely desperate by offering them usurious loans at eyewatering interest rates. The typical interest rate on a Wonga loan is an incredible 5,853% APR!

Even in the free-market obsessed United States, such outrageous loans are illegal, but here in the UK the Tory party are stubbornly resisting efforts to regulate the so-called Payday lending sector and introduce maximum APRs. Does this resistance have anything to do with the fact that one of their biggest donors runs one of the biggest legal loan shark operations in the country?

In 2012 the Tory leadership invited Beecroft to draw up Tory employment policy for them."

Why are we picking on Tory donors as if donors to other parties are exempt from such dealings?

Matt.

Fookin sh1te government. Oh, and tax breaks for themselves and their businesses.

End of thread.

Hahaha, as if this isn't true of all Governments. Did your beloved Labour party not walk us into two unwinnable wars which cost tens of thousands of lives?
If that preferable to a few public school boys creaming off the top for them and their mates?

Daft argument and doesn't even begin to explain why the OP seems to ignore entirely the other parties who have done exactly similar things.

Matt.

Not a daft argument, and I think the Conservatives are mentioned here simply because this particular item came up at this time. No doubt, as Matt has indicated, other parties also have their skeletons in the cupboard (if that's the correct expression) and Farmer's Friend, if not yourself, Matt, would comment on them too should the occasion arise (as it undoubtedly will)...

Hell, I'm sure even UKIP could come up with something to be criticised... However, UKIP has Nigel Farage...

Correct me if I'm wrong...

But didn't the coalition say they planned to crack down on these pay-day loan companies? I know it was just words at the time but for once let's call a spade a spade and at least say it is on their mind.

You can criticise this government for a lot, but this is a little off.

ferrarilover wrote:Hahaha, as if this isn't true of all Governments. Did your beloved Labour party not walk us into two unwinnable wars which cost tens of thousands of lives?
If that preferable to a few public school boys creaming off the top for them and their mates?

Daft argument and doesn't even begin to explain why the OP seems to ignore entirely the other parties who have done exactly similar things.

Matt.

My beloved Labour party doesn't exist. Hasn't done for decades.

But the current version is still infinitely better than any fookin Tory party has been in my living memory.

EmetEdadsBeard wrote:My beloved Labour party doesn't exist. Hasn't done for decades.
But the current version is still infinitely better than any fookin Tory party has been in my living memory.

I know what you mean. Con, Lab, Lib, they're all the same these days; have been since the mid-eighties. Exemplified by their look-alike, sound-alike leaders. They do not represent the majority of ordinary British people. This is why I now support UKIP, in addition to UKIP's promise to get us out of the disaster that is the EU.

The Farmers Friend

The typical interest rate on a Wonga loan is an incredible 5,853% APR!

APR figures can be a bit misleading, as it's more of a hypothetical figure showing a calculation based on no repayments being made over a year, and consequently interest accumulating on interest etc. In reality nobody pays thousands of percent interest on a Wonga loan. In addition it's worth remembering that 90% of Wonga customers would recommend them to a friend, and not many companies can boast that level of customer satisfaction, even if we take into account the fact that a large number of them are gullible Geordies

You're a shareholder...?? =D

The Farmers Friend wrote:The typical interest rate on a Wonga loan is an incredible 5,853% APR!

APR is not an accurate measure of the interest rate for a short term loan like this. APR is designed to represent interest on loans with a repayment period measure in years, not in weeks. That Wonga (and others) charge a lot is not in dispute, but I never understand the hate they get. Nobody forces you at gunpoint to sign the credit agreement, they don't hide their rates.

I'd much prefer they list interest rates as how much interest you pay on the loan overall - that is, the profit the company makes on what they give you. For something like Wonga; £400 for 30 days ends up costing you £127.15. so 31.78%. Still a lot, of course. Compare that with a mortgage, though - say you borrow £100,000 at 5% over 25 years. by the end of that term you'd have actually paid £175,377, amounting to 75%.

The Farmers Friend wrote:Even in the free-market obsessed United States, such outrageous loans are illegal,

Incorrect. They are here just as much as they are in the UK, and with very similar rates. They're marketed a bit differently, and less boisterously, but they are there. Google "money mutual" if you must.

Even worse than these are the loans offered by organizations ownd Native American tribe - with them you can borrow $850 but you only get $500 of it for yourself ($350 'loan fee'), and it's repayable in 12 easy monthly payments of $150..

(again, nobody forces you to sign up to these things)

I had actually made a point regarding the APR and then my phone decided not to post it. I was having a conversation about this with a friend who used to work in this sector. What people don't realise is how much APR you generate in normal life. For example, you borrow £10 off a friend and pay him back a week later and buy him a pint at £3.50 to say thank you. That's around 14,000% APR. Doesn't mean it's a ridiculous sum of money to pay back, but when you look at a figure designed for long term loans and use it for the short term, it looks huge.

Wonga (and others) will always get a bad press because of figures like these, when in reality they are offering a service where you can borrow hundreds of pounds from someone you don't know and they have the risk that you won't pay them back. I think the rate that they offer you (I believe it's around 10% of the loan amount) is really not that bad.

The big problem with payday loans is not so much the interest rate as the fact that if you have to borrow a sum which is repaid on your next payday, you will then be short of money thereafter, which could create another crisis requiring a further loan, and so on.

Better to budget properly, live frugally if necessary to pay your bills, do not overspend, and never get into debt.

Gullscorer wrote:Better to budget properly, live frugally if necessary to pay your bills, do not overspend, and never get into debt.

"never getting into debt" is extremely hard to do, unless you have no intention of buying a house, a car, or maybe even ever going on holiday.

The point about payday loans leaving you short the week/month after is fair, of course, although it's up to the individual to decide whether or not taking any sort of loan will leave them in trouble next time.

Agreed; buying a house is the one big purchase in life for which most people will require a loan, and most people manage their finances in such a way that they are able to service their debts without problems, and even insure against such things as redundancies and emergencies. As you say, taking on debts is up to the individual, but unfortunately there are many people who lack the ability to handle money, control their spending, and arrange their finances in a proper way; these are usually the people who need help, guidance and protection from moneylenders, usurers and loan sharks.