Credit Today online

"A survey commissioned by insolvency trade body R3 shows that seven per cent of people in financial difficulty have already contacted a loan shark".

Or to put it another way, 93% of persons in debt have not contacted a loan shark.

Why can't these surveys be a bit more positive?

I am quite often amused at some of the reports that come out. So who are "R3" and a report such as that does not tell the whole picture.

Yes maybe 7% of the nation has reverted to loan sharks. But what about those that are now buying goods from what used to be called the "tally man" at exorbitant prices.

Certainly in my last role we supplied many companies that sold on to some of the poorer parts of the land. Example would be a washing machine at trade price of £124 that retailed in one of the big electrical retailers at £199 was being sold for £329 and then there was interest on top of 36% APR. Needless to say these companies were flourishing. Fact is they still are. So whilst the headline is " 7% of people in financial difficulty have already contacted a loan shark" the fact people in financial difficulty do not just contact loan sharks they contact retail sharks as well. What is the number overall who knows..... but I bet its more than 7%.

Ron

Strikes me that some of the 'legitimite' companies out there are in essence 'sharking'.
According to an advert on TV I saw a few days back the APR was something like 250%.
It was for one of these very short term loan companies....sort of to tide one over the weekend till payday.
I can understand the principal of why the APR for such a short-term loan is of that size.
However, presumably their meat and drink will be those people who do NOT pay the loan back on time....that loan will quickly escalate into exorbitant amounts I guess.

250% is bad but not as bad as some pay day loan companies for example..............
I found this rate on a well known pay day loan company site 2339.30% in the UK

Really does seem a crazy rate but hey people in desperate times will accept anything!!!!!

http://www.traceadebt.com

APR's are of course totally misunderstood. A firm lends you £100 and you agree to pay them back £122.12 in a months time. A pretty good and very fair deal?

That is an APR of 1000%.

But it is not just the sharks. About 4 years ago I wanted to consolidate my mortgage. I agreed the number with the company. (who are part of one of the big 4 banks) They agreed the sum, I signed the forms and they told me that all would be sorted in seven - 10 days as valuation already done Etc. So I set about moving other money around and settling some bills. After 10 days I asked why everything had not been resolved and I was informed that [1] I needed to take out PPI at a cost of £25k and
[2] They needed to extend the term.

I said no they could not do that as they had already agreed, but they said if I did not agree they would not go ahead. As I had already put myself in a position of having to now do this new deal as I had already acted I had to accept. The fact was that I already had a small mortgage of £75k with them and I was only increasing to £100k and they were insisting on a PPI charge of £25k In effect for a £25k advance.

In addition... Whilst everyone was reducing mortgage rates last year they put theirs up by 1%. No wonder they made such huger profits!

So is it the sharks that are sharks or is it everyone?