Payday UK is one company that is considered as one of the most premium payday lenders in the world. They are one such company that have been instrumental in understanding the need of borrowers and arriving at methods to be able to tackle the problems that most of the borrowers are facing today. http://www.pacific-odyssey.co.uk/

2. Payday UK is one company that is considered as one of
the most premium payday lenders in the world. They are
one such company that have been instrumental in
understanding the need of borrowers and arriving at
methods to be able to tackle the problems that most of
the borrowers are facing today. In addition to this, their
debt collection practices have known to be at par with
the new regulatory framework that is slowly coming into
practice today, which has led to great borrower
confidence. In an industry which is notorious for high
interest rates, horrible debt collection practices, it has
become an imperative for more responsible lenders to
join the industry and work towards the overall
upliftment of the general public.

3. Most store front payday lenders charge a fee that ranges
between 10-20 pounds for every 100 pounds that you
borrow. This is a standard market rate that has been set
by these institutions and it can vary depending upon the
state in which the payday lender functions. There are a
few states which have higher or absolutely no limits
which depends on the loan size. The borrower income is
an important consideration in payday loans, as a lot
depends upon the demographic of people who are
coming out and applying for a loan. A majority of
the payday lenders have claimed that they have people
with an income range of 10000-40000 pounds on an
average.

4. It is also important to understand that this
income doesn’t reflect the entire household
income. There could be other sources of income
in the household and this holds true for a large
number of people applying for a loan. It is
important to consider the intensity of use, in the
hands of the borrowers. What their pattern of
buying a loan is, how often they are looking for a
loan. In this consideration, it is also important to
consider that even a roll-over of a loan is
considered as another loan.

6. There have been various studies to suggest this level of
activity amongst the borrowers and this can be seen with
approximate figures depicting these patterns. Close to
50% of the borrowers have more than 10 transactions
over a certain period of time, 29% had more than 20
transactions and a vast minority has about 1-2
transactions. This clearly shows the immensity of the
situation. People have become increasingly dependent
on these loans and it is being shown through studies
such as these one.

7. The default charges and the high interest rates are what
are causing the borrower’s to roll over the loan which in
turn is forcing them into the cycle of debt. This also
depends on how frequently the borrowers are paid. The
people who aren’t paid as frequently tend to take out
fewer loans as they don’t have a stable source of income.
The people who are frequently paid tend to take out
more loans than the rest. This is a common
phenomenon which is impacting regulations all over.

8. There has been a concerted effort by payday lenders to
dodge the reforms that have been put into place and this
has led to major players leaving the industry as a result
of that. There has been a considerable amount of
subterfuge in this regard where the payday lenders
position themselves as brokers. This enables them to
charge the maximum interest rate along with the broker
fee which compensates for the amount of money they
are losing out on, if they don’t deal in payday loans. This
particular practice increased drastically after 2005. In
that same year, there was a crackdown by regulatory
bodies like the Financial Conduct Authority who were
tying up with national banks to avoid consumer
protection laws and function on their own free will.

10. Despite many payday lenders claiming the high
interest rates for their functioning, there is no
law that clearly states that the payday lenders are
allowed to lend at triple-digit interest rates
which could be one of the main problems, since
nothing has been clearly defined up till now. If
anything, there have been laws which have been
responsible for de-regulating the industry like
the Monetary Control Act of 1979.

11. Although there are several payday lenders in the
industry today which are functioning under
different names and many of them carry a great
amount of goodwill in the market, the license
and the label which they carry is not as
important as the high interest rates and the
balloon payments which are due on the
borrowers next payday.

12. It has also been observed that there are many
direct lenders which are selling under a third
party where there is no law governing their
functioning and at the same time, the debt
collection practices are also being leased out to a
third party where it cannot be linked back to the
direct lender and as a result of this, they have
become accustomed to resorting to harassment
and other techniques which have hampered the
condition of the customer and this has led to
many malpractices being adopted by these third
parties.

14. What is important to consider in this scenario,
is how difficult it has become for regulatory
bodies to track these organizations and link the
third parties activities back to the direct lender,
as there is no connecting link between them as
such. This creates an uncertain environment,
where the regulators find it extremely difficult
to reach out to the right culprits in this entire
mess.

15. What is important to consider in this entire
scenario is the fact that there have been many
organizations that have worked towards capping
the interest rates and impose regulations which
have been made mandatory but the states need
to work in tandem with the regulatory body in
order to ensure that there is no scope for any
kind of malpractice that can be tolerated. This
urgency needs to be realized by the states as well
and all of them need to come to a common page
in what could become a repeat of 2008.

16. For more information visit our website:
www.pacific-odyssey.co.uk

17. Thank You