Have I Got a Deal for You

There is little regulation of payday or title loans in the U.S. and many people under the worst of circumstances are victimised them.  However, these outfits are amateurs next to the short-term loan vendors in Britain.

The way title loans work in the U.S. is that someone can get a loan against his vehicle.  The loan is probably needed because the person is not working so the probability of paying it back is not high and consequently the vehicle is taken against the debt by the title loan company and sold off, never to be seen again.  This removes the last chance for the person to get to a job and thus makes it nearly impossible to find work.

In England they bear names like Peachy.co.uk (1058%), QuickQuid.co.uk (1734%), Sunny.co.uk (1931%) and maybe some day Cute-Little-Puppies.co.uk.  They use big-budget, highly-polished television advertising to promote themselves.  The rates (shown in parentheses next to the names) are so outrageous than even a back-street loan shark would be embarrassed to charge them and the result is that many people are in a deadly spiral of kiting one loan vendor against another to make the payments.  It's impossible to keep up with interest rates like that so they inevitably get deeper and deeper into debt.

Something that doesn't make much sense about this is why one vendor would offer money to a customer when that customer is already in debt to one or more others so presumably they don't check or people lie on the applications.

The obvious question is why anyone would take such a rotten deal.  It's tempting to blame it on the heroin addiction that's rampaging here but that would require more investigation than I can provide.  What is obvious is that people are taking loans they cannot possibly repay and there is no governmental regulation of the companies that do it.

Even better, the government is now considering a program to offer mortgages to people for homes when the buy only has five percent to put down on the sale.  It's only been about five years since the American economy collapsed after sub-prime mortgages created a massive housing bubble and now Britain is going to create another one.  Brilliant.