It’s fair to say I’ve been banging on a bit about poverty recently, what with all those articles about the government assault on welfare and charities covering the gaps and such and such, and while this sentence started out with the intention of apologising for all my banging on it’s looking more like ending on a justification for it because banging on’s what you get for me being around poverty all day and everyone else voting Tory. Poverty, as I was saying, is shit. Poverty breeds desperation. Desperation’s just waiting to be exploited. And the world will never run out of people looking to exploit the desperate and the poor because the world will never run out of arseholes.
As people near the end of the month, or the end of the fortnight if they’re on benefits, cash starts to run out; maybe because there’s not much to begin with, maybe because they’ve not been shown how to manage money or maybe, if we’re not afraid of sounding too much like the Daily Mail, because they’ve not got a great sense of responsibility. Here’s where the doorstep and payday lenders kick in. These are the arseholes who offer cash to poor people with interest rates so high Chewbacca couldn’t reach them on a stepladder and tippy toes. We’re talking the likes of Provident, Shopacheck, Wonga and a band of other arseholes just like them. Most cases I work, these companies make an appearance.
The interest they charge is astonishing. Shopacheck gives an example of how borrowing £300 for 32 weeks would cost £180 in interest. Wonga shows how if you borrow £400 for just 31 days you’ll repay £129 in interest. Their representative APR stands at 4,214 percent. As a general rule I’d say if there’s a comma in your interest rate it’s a couple digits too high. In the absence of alternatives, for people desperate enough to go to these arseholes these are crippling interests rates that stay crippling long after payday comes back around. Fall short one month, go to Shopacheck, you’ll be falling short for close to eight months. Repeat borrowers get caught in a cycle, forever a month behind, left with a fraction of the money they could have kept.
A few weeks back, before I took my largely unnoticed sabbatical and all hell broke loose in the world of light entertainment, Panorama ran a show about these arseholes. It showed vulnerable people with diminished capacity talked into loans they didn’t need, people well into their second decade of repayments that started with a loan of close to bugger all. Naturally, Provident issued a statement saying everything in the world of Provident was not only fine but also dandy, and making out how everything we’d seen actually happen in the show was probably just a trick of the light.
The morality here’s in the sewers. Specifically the sewers of the 19th century, where Charles Dickens’s poos float past with populist contempt. This is people doing lousy things to other people because they like money better than they like people. They know what they’re doing, getting rich off the poverty of others. And business is booming. Last month Wonga said their profits over the past year had shot up to £45 million. That’s a rise of 269 percent, the kind of increase you’d usually only see if you borrowed twenty quid off them for half an hour.
The amazing thing is these arseholes are actually regulated. They’re not, technically, loan sharks. They’re okayed, regulated lenders. For those of you with an interest in semantics, when Direct.gov warns people about loan sharks they describe them as giving loans on very bad terms (check) with an extortionate rate of interest (with you) and harassing you if you get behind with your repayments (yep). There’s a fairly fine line at work here. True, Wonga does less in the way of leg breaking but when that’s your only claim to the moral high ground you know you’re in trouble.
The more amazing thing is, according to these arseholes’ websites, their customer feedback places them somewhere around awesome. Wonga reckons 92% of surveyed customers would recommend it to a friend. Shopacheck reckons 94% of its customers are satisfied with its service. And when I talk to people about these arseholes, generally they see them as a viable way of getting through. And I find that horrifically sad. People being exploited, and people thinking they’re being done a favour.
So what’s a Zero to do? Not much, really. Just tell people not to use them and hope they don’t.
Photo credit: The Zero