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Saturday, 18 January 2020 13:22

Banks worse than payday loans for charges

The Payday loan industry comes in for its fair share of stick from financial do- gooders and hypocrites. Sometimes rightly, but most of the time unnecessarily.

Take this week for instance, everybody from the FCA to certain financial charities, have slammed payday loan providers for their ‘lack of empathy and understanding’ when it comes to customers applying for their loan products. They believe that customers to these firms are charged well over the odds in terms of interest, and believe that payday loan providers are running riot. We’ll explain why people need to look a little closer to home before they start throwing accusations around, shortly. 

The Financial Conduct Authority and other self-styled ‘experts’ came out attacking like a pack of wolves this week when it emerged that there has been a rise of around 22 per cent in payday loan applications. This, they say, is linked to a 26 per cent rise in the number of people in debt. These figures are in comparison to the same time last year.

 It has also been confirmed that there has been a 120 per cent rise in the number of complaints made to the FCA regarding the conduct of some payday loan providers. It appears that payday loan providers really are the devil and finance should be sought elsewhere at all costs. 

And if you believe that, you’re a mug.

 Everybody has had it drilled well into their heads that payday loan firms charge astronomical amounts of interest and are the very pits when it comes to getting a loan. But how’s this for hypocrisy? Many banks have been slammed by financial watchdogs this week for charging extortionate overdraft fees – some of which have been documented as being 12 times more than what some payday lenders charge. 

That’s right. Some banks are charging customers well over ten times what some payday lenders do simply for going into the red.

 So, despite payday loan providers receiving abuse left, right and centre, it appears that the biggest and truest rip off merchants are the banks. 

Importantly, the FCA has said that the overdraft charges are unacceptable and will look to sort this with immediate effect. Banks and building societies will be prevented from collecting larger fees on unplanned overdrafts, it is hoped. 

We say; it’s about time. Banks are making the biggest mockery out of people, not payday loan providers. Nearly two and a half billion pounds was made by banks last year cashing in on people going into the red. It really is hypocrisy of the highest order.

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