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from wikipedia: The phrase caveat emptor arises from the fact that buyers often have less information about the good or service they are purchasing, while the

from wikipedia: The phrase caveat emptor arises from the fact that buyers often have less information about the good or service they are purchasing, while the seller has more information. Defects in the good or service may be hidden from the buyer, and only known to the seller. Thus, the buyer should beware. This is called information asymmetry. from me: Payday loan companies target the least educated, least financially sophisticated and most vulnerable members of society. Should society step in to protect these members of society? What about this: Should you let me, a smooth talking prick, put a brass plaque on the wall and convince your aging Mothers and Grandmothers to invest in my 2&20-fees option fund? Should you regulate my behaviour? Is it their fault for not understanding or my fault for taking advantage?

gadders 12y ago
So you think that nobody except the financially desparate uses Wonga?
- M2Ys4U 12y ago
  People who aren't financially desperate have access to other lines of credit.
- gaius 12y ago
  It's a fair question, and you should not be getting down voted. Wonga started out as an iPhone app. No one with a luxury smartphone is actually poor - just bad at managing cash flow. Hence the original term payday loan.
  - jiggy2011 12y ago
    I'm not sure if that is true, an iphone 4 is available with a £20 per month contract and no up front payment for example.
    - gaius 12y ago
      Now certainly, but not when Wonga started.
      - jiggy2011 12y ago
        I assume you can also use the regular website.
        gaius 12y ago
        I've not tried it. But my point stands that Wonga's demographic has disposable income, and spends money freely on non essentials. It's hard to describe these people as exploited in the traditional sense.
    - Silhouette 12y ago
      Ah, yes, mobile phone plans, where a multi-hundred pound phone is free++. Another prime example of a market exploiting the trust/ignorance of consumers. ++ Included phone is free as long as you commit to spending far more than any normal person's call and data charges with the network you contract with. Minimum period 2 years. Early exit fees apply. Call charges and other fees may be increased during the term of your contract. Phone will be unlocked on request at the end of your contract period subject to additional fee. Ts & Cs apply, but for some reason the normal comparative disclosure obligations for companies offering other financial services don't.
  - hessenwolf 12y ago
    Junkies and other addicts have smartphones. It's a thing. Source: Oh, let's just not go there.
DanBC 12y ago
In theory the companies are regulated to protect people from the worst excess while still allowing legal behaviour. I'd prefer the companies to offer a rigorous debt management interview before offering credit. People get budgeting advice; are told how to switch utility provider; are advised if they're paying over the odds for anything; trained how to budget; and then given a short term loan to help them. There is a lot of scummy behaviour at this end of the market. "Cash for gold" pays well below the rate; doorstep loans are abusive; credit cards have high rates of interest; etc etc. In England there is a niche for services and apps that help people learn how to budget and spend within their means. Benefits and tax credits are very complex, and anything that helps naive people negotiate through those systems would be useful.
- gadders 12y ago
  >> doorstep loans are abusive The Joseph Rowntree Trust did an investigation into doing these on a non-profit basis, and it would still need to charge over 100% interest.
  - DanBC 12y ago
    I don't care about the interest. I do care that most doorstep loans are deceptive about the cost of the loans; how to escape debt; etc.
- jiggy2011 12y ago
  The appeal of these loans is that they are fast and don't require doing anything in person. There are already various initiatives to help people with budgeting, just financially irresponsible or people with gambling addictions don't tend to use them.
- Silhouette 12y ago
  I'd prefer the companies to offer a rigorous debt management interview before offering credit. There's a certain irony in that recently the rules for mortgages were changed to mandate more-or-less exactly that. AIUI, mortgage lenders now have a statutory duty to investigate whether a potential customer has a reasonable chance of repaying what they owe. So, gone are the days of just lending some multiplier of a customer's self-certified salary/income -- which of course was always a silly practice, both for using a simple multiplier to gauge someone's entire financial power and for trusting self-certification. Today a prospective borrower can look forward to multi-hour interviews, sometimes reportedly going as far as asking people interested in mortgage-scale loans about how much they spend on hair cuts. The irony is that for the kind of person taking out a mortgage that is anything close to within their means, having an extra hair cut is highly unlikely to make any difference to anything, while for the kind of person who is relying on payday loans, it might well be.

gadders 12y ago

So you think that nobody except the financially desparate uses Wonga?

M2Ys4U 12y ago
People who aren't financially desperate have access to other lines of credit.
gaius 12y ago
It's a fair question, and you should not be getting down voted. Wonga started out as an iPhone app. No one with a luxury smartphone is actually poor - just bad at managing cash flow. Hence the original term payday loan.
- jiggy2011 12y ago
  I'm not sure if that is true, an iphone 4 is available with a £20 per month contract and no up front payment for example.
  - gaius 12y ago
    Now certainly, but not when Wonga started.
    - jiggy2011 12y ago
      I assume you can also use the regular website.
      - gaius 12y ago
        I've not tried it. But my point stands that Wonga's demographic has disposable income, and spends money freely on non essentials. It's hard to describe these people as exploited in the traditional sense.
  - Silhouette 12y ago
    Ah, yes, mobile phone plans, where a multi-hundred pound phone is free++. Another prime example of a market exploiting the trust/ignorance of consumers. ++ Included phone is free as long as you commit to spending far more than any normal person's call and data charges with the network you contract with. Minimum period 2 years. Early exit fees apply. Call charges and other fees may be increased during the term of your contract. Phone will be unlocked on request at the end of your contract period subject to additional fee. Ts & Cs apply, but for some reason the normal comparative disclosure obligations for companies offering other financial services don't.
- hessenwolf 12y ago
  Junkies and other addicts have smartphones. It's a thing. Source: Oh, let's just not go there.

DanBC 12y ago

In theory the companies are regulated to protect people from the worst excess while still allowing legal behaviour. I'd prefer the companies to offer a rigorous debt management interview before offering credit. People get budgeting advice; are told how to switch utility provider; are advised if they're paying over the odds for anything; trained how to budget; and then given a short term loan to help them. There is a lot of scummy behaviour at this end of the market. "Cash for gold" pays well below the rate; doorstep loans are abusive; credit cards have high rates of interest; etc etc. In England there is a niche for services and apps that help people learn how to budget and spend within their means. Benefits and tax credits are very complex, and anything that helps naive people negotiate through those systems would be useful.

gadders 12y ago
>> doorstep loans are abusive The Joseph Rowntree Trust did an investigation into doing these on a non-profit basis, and it would still need to charge over 100% interest.
- DanBC 12y ago
  I don't care about the interest. I do care that most doorstep loans are deceptive about the cost of the loans; how to escape debt; etc.
jiggy2011 12y ago
The appeal of these loans is that they are fast and don't require doing anything in person. There are already various initiatives to help people with budgeting, just financially irresponsible or people with gambling addictions don't tend to use them.
Silhouette 12y ago
I'd prefer the companies to offer a rigorous debt management interview before offering credit. There's a certain irony in that recently the rules for mortgages were changed to mandate more-or-less exactly that. AIUI, mortgage lenders now have a statutory duty to investigate whether a potential customer has a reasonable chance of repaying what they owe. So, gone are the days of just lending some multiplier of a customer's self-certified salary/income -- which of course was always a silly practice, both for using a simple multiplier to gauge someone's entire financial power and for trusting self-certification. Today a prospective borrower can look forward to multi-hour interviews, sometimes reportedly going as far as asking people interested in mortgage-scale loans about how much they spend on hair cuts. The irony is that for the kind of person taking out a mortgage that is anything close to within their means, having an extra hair cut is highly unlikely to make any difference to anything, while for the kind of person who is relying on payday loans, it might well be.