- - - - - - - - - - - - -

Wednesday, September 03, 2008

'Ridiculous' interest rates hit desperate families


'Ridiculous' interest rates hit desperate families
Families are borrowing money at interest rates of up to 8 per cent a week to make ends meet between paydays. Budgeting services have criticised the rates and say greater restrictions need to be placed on the amount of interest lenders are allowed to charge. But the Government has ruled out capping interest rates, saying overseas experience suggests it will do nothing to protect consumers. Super Loans, formerly known as XtraCash, is charging interest of 8 per cent a week on money lent from its three Wellington stores. Law student Andrew Shann took out a $300 loan - signing a 14-week contract and offering up his guitar as security - as part of his research paper on consumer law. A copy of the contract shows the $300 loan accrued 8 per cent interest every week for the 14 weeks of the loan period - pushing the total amount owed to $636. The annual interest rate equals 416 per cent. Mr Shann said the interest rate was "outrageous". Wellington actuary John Melville said it was "absolutely, stupidly ridiculous". Such loans preyed on the "financially illiterate".

416% interest? It sounds like a NZ First financial scam doesn’t it, a deal as unfair as this is almost impossible to allow happen but the severe credit crunch isn’t just hurting middle class with their 4th property speculation, it’s crushing those right on the bottom with no credit rating whatsoever. When looking at the Loan Shark industry, Labour refused to set a cap on rates because they claimed it would lead to the industry going underground, but I think that’s a poor excuse for not getting involved when you see people being as horribly manipulated as they have been here.

33 Comments:

At 3/9/08 8:05 am, Anonymous Benson said...

I think financial education needs be taught in schools from a young age. There is heaps of free information out there (www.sorted.org.nz is a good resource) but people obviously need it drilled into their skulls that the nice financial institution that lends you money will want it back (with interest).

 
At 3/9/08 8:06 am, Anonymous Redbaiter said...

You guys want the government to run everything. Make everyone dependent on government and unable to think for themselves. You want the government to run the education system, so nobody gets a real education and are therefore easy prey to scammers and cronyists and crooks. You socialists keep producing generations of half educated idiots because its the big game plan, the one that keeps you in power and therefore keeps government spending high and therefore creates demand for money and therefore DRIVES UP INTEREST RATES. You're whining about this shit and its all your damn big gummint worshipping doing.

 
At 3/9/08 8:12 am, Blogger Truth Seeker said...

It's difficult to protect the stupid from themselves. They will often fight you like tigers to defend heir right to any f-witted thing that comes into their head.

That doesn't stop them from asking to be saved when he cost of their stupidity bites heir bums. They may even loudly declaim their ought to be a law against the stupid thing they fought like tigers to be able to do.

Of course it makes no sense. They are stupid.

 
At 3/9/08 8:21 am, Anonymous Benson said...

Truthseeker, desperation will drive people to do stupid things. It's all well and good us nice middle class folk sitting here calling the people that signup for these 'payday' loans stupid but I imagine that some of them have nowhere else to turn (other than to crime or prostitution). The trouble is if over regulate or shut down these legal ursury shops then you simply drive the poor into the hands of illegal loan sharks. Education is the key.

 
At 3/9/08 8:31 am, Anonymous Redbaiter said...

It's difficult to protect the stupid from themselves.

Yeah so true Mr. Truthseeker sir. ..but us dumbfuck country bumpkins are all so grateful for the efforts of intellectually supercharged well educated sophisticates such as yourself... kiss kiss

 
At 3/9/08 8:35 am, Anonymous lock and load said...

wow isn't that chip on redbaiters shoulder, it's so huge!

 
At 3/9/08 8:54 am, Anonymous Anonymous said...

"It's difficult to protect the stupid from themselves. They will often fight you like tigers to defend heir right to any f-witted thing that comes into their head."

Hence your irrational defence of labour.

 
At 3/9/08 9:26 am, Anonymous Anonymous said...

If we are going to attack loan sharks because they exploit the poor and stupid, you may as well ban hire-purchases while you are at it.

All the people I know how can't pay their bills each month, who plead longest and loadest about poverty all have houses filled with shit they don't need.

Flat screen tvs, playstations, dvd hard drives, ipods, the latest flashy cell phones - all that shit they don't need, all on hire purchase. And when it comes to paying the bills? Oh we can't afford it, its not fair!

Ever driven through the rough part of town and marveled at the number of houses with sky satalite dishes?

They'll be the same ones buying lotto tickets and going on holidays paid for with their credit cards because "I deserve a break"

Dumb poor mother fuckers are the architects of their own ruin.

 
At 3/9/08 9:32 am, Anonymous Avenger said...

Redbaiter is entirely correct: morons will be morons until the end of time and nothing can be done about it.

Live your life and stop meddling with others.

 
At 3/9/08 10:09 am, Anonymous Anonymous said...

I love hearing those on the right post here, it's all their dumb fault, you chose to be poor. A lot of these people are borrowing to pay for food for fucks sake and all we get are stereotypes used as fact to launch attacks on people who are being horribly abused by a barely regulated wild west finance sector. What a callous view of our society you have in your nice suburbs.

 
At 3/9/08 11:31 am, Anonymous Redbaiter said...

"What a callous view of our society you have in your nice suburbs."

There's nothing stopping you from giving these people all the help you think they need. Get down there and give it to them. Give them money. Give them your house. Give them whatever. What's stopping you??? Not me buddy. Go for it. Come back here afterwards and let me know what you did. OK?

 
At 3/9/08 11:48 am, Anonymous sdm said...

" launch attacks on people who are being horribly abused by a barely regulated wild west finance sector."

Umm, nobody forces them to borrow from loan sharks....

 
At 3/9/08 12:21 pm, Blogger Bomber said...

Umm, nobody forces them to borrow from loan sharks....
Come on Scott, at what point do limited options stop becoming choice?

 
At 3/9/08 4:23 pm, Anonymous Anonymous said...

Why don't they go don't to WINZ and get an emergency needs grant?

 
At 3/9/08 4:43 pm, Anonymous Anonymous said...

Geez you lot are unfeeling bastards! Some people are easily fooled. Does that make it ok for lowlives to trick money out of people? Displaying the interest rate as 8% is plainly an attempt to defraud, or they'd display it as 416% per annum the way they ought to. Who among you thickos thinks it's a coincidence that this company's advertised rate per week is so high as to make it seem like a cheap per-annum rate? Some poor hard-up souls, especially the elderly I imagine, are going to go in assuming that it's a per-annum rate like it is everywhere else and will fall for this usury. It's absolutely, completely, disgusting.

 
At 3/9/08 7:08 pm, Anonymous Redbaiter said...

"It's absolutely, completely, disgusting."

Sure it is, but its the politics of people like you that are behind a lot of it. Your approach makes people submissive and lacking in initiative and unwilling to take command of their own lives. Easily manipulated by the leeches who make their money this way. Ditch socialism and the welfare state. Give this country its heart and it courage and its hope back. The leeches would find it a lot harder to sell their product to a generation of smart self sufficient people of independent mind.

 
At 4/9/08 6:43 am, Anonymous lock and load said...

Sure it is, but its the politics of people like you that are behind a lot of it. Your approach makes people submissive and lacking in initiative and unwilling to take command of their own lives. Easily manipulated by the leeches who make their money this way. Ditch socialism and the welfare state. Give this country its heart and it courage and its hope back. The leeches would find it a lot harder to sell their product to a generation of smart self sufficient people of independent mind.
Wow, you have no compassion whatsoever do you, and you dress your selfishness up as some sort of rightous claim of independence. My god, you really do represent the right well don't you, I've never seen such chips on a persons shoulders

 
At 4/9/08 8:42 am, Anonymous Anonymous said...

Showing your true colours eh redbaiter? The law of the pack - leave the old and infirm out for the scavengers. Except you like to target the mentally infirm in particular.

Give this country its heart and it courage and its hope back.

Spare us the bullshit platitudes you fucking donkey.

 
At 4/9/08 8:46 am, Anonymous Redbaiter said...

"Wow, you have no compassion whatsoever do you, and you dress your selfishness up as some sort of rightous claim of independence. My god, you really do represent the right well don't you, I've never seen such chips on a persons shoulders"

Great argument. Here's some reality to chew over. Your narcissistic compulsion to indulge yourself in the feeble artifice of "compassion" does more damage to the fabric of society than my desire to see people more self sufficient and independent.

 
At 4/9/08 9:40 am, Anonymous Redbaiter said...

"Showing your true colours eh redbaiter? The law of the pack - leave the old and infirm out for the scavengers"

Yeah that so right Anon. Anyone who doesn't buy into your destructive left wing social schemes is automatically an inhuman monster. Its says something about the innate idiocy of the totalitarian left when they cannot even see the obvious peril in promoting such a viewpoint. You would always rather demonize then compete with ideas. Look back in history and see the outcomes of such habits.

 
At 4/9/08 11:02 am, Anonymous Anonymous said...

>Showing your true colours eh redbaiter? The law of the pack - leave the old and infirm out for the scavengers. Except you like to target the mentally infirm in particular.

Yeah that so right Anon. Anyone who doesn't buy into your destructive left wing social schemes is automatically an inhuman monster.


Lol, what schemes would they be you clown?

Its says something about the innate idiocy of the totalitarian left when they cannot even see the obvious peril in promoting such a viewpoint.

That statement is such complete crap redbaiter, wake up. You insist on taking your opportunities to bash the left but with a name like "redbaiter" it was already clear what your agenda was. I point out that these bastards are just cheating people and you somehow think you're able to blame that on the political left. You want to support the cheaters because you can then blame the left for creating people stupid and weak enough to be cheated (lol, only the most cretinous of the right will buy into that one... which is kind of ironic really... :) ), but then you don't like it when I point out to you the stupid barbarism of your suggestions. You really are fucking confused.

You would always rather demonize then compete with ideas.

Ideas need a basis for them you idiot. Everything is "obvious" to you but there is no support for your conclusions. You must be used to having your comments criticized though because you're quick to hurl accusations of demonization before anything too much can be said. Keep braying, donkey.

Look back in history and see the outcomes of such habits.

There we go again, as expected. Nothing worth saying, no reasoning, no substance, just more platitudes.

 
At 4/9/08 11:44 am, Anonymous Redbaiter said...

"There we go again, as expected. Nothing worth saying, no reasoning, no substance, just more platitudes."


Funny then that you're so fired up by it.

Read "The New Totalitarians". Written some time ago by Roland Huntford, it describes the social state in NZ so accurately, especially the foaming at the mouth intolerance for political dissent that is characterised by such as yourself.

 
At 4/9/08 11:51 am, Anonymous Anonymous said...

Time to lay down some heavy government regulation and gift-wrap another "industry" to da gangs da gangs eh Bomber?

 
At 4/9/08 12:10 pm, Anonymous Anonymous said...

When a hard-up grandmother falls for this con it will be all Labour's fault. They made her old and stupid.

 
At 4/9/08 12:39 pm, Blogger Bomber said...

Time to lay down some heavy government regulation and gift-wrap another "industry" to da gangs da gangs eh Bomber?

Well if it was illegal to lend above the cap level, but not illegal to borrow da gangs da gangs wouldn't really make much money would they.

Redbaiter while I admire your independent streak, I've alwyas found it simply too ruthless, and I just don't buy the Hobbes state of nature stuff you seem to imply a lot of the time.

 
At 4/9/08 1:05 pm, Anonymous Anonymous said...

Yeah because gangs would NEVER break the law to lend to someone who couldn't borrow money at the cap level. Just like they would NEVER break your face for not paying up.

 
At 4/9/08 1:12 pm, Blogger Bomber said...

Yeah because gangs would NEVER break the law to lend to someone who couldn't borrow money at the cap level. Just like they would NEVER break your face for not paying up.

Yes, but if its illegal to lend and not illegal to borrow that gives a person Police protection, unlike the drugs insudtry where buying or possessing drugs is as illegal as selling them, see the difference? It's not perfect sure, but it's a damn sight more agreeable than 400% rates.

 
At 4/9/08 1:22 pm, Anonymous Anonymous said...

Let them provide 400% rates if they want. They should just be required to advertise them as such, none of this 8%* crap.





* per week

 
At 4/9/08 1:48 pm, Anonymous Anonymous said...

Yet in countries where possession of a small amount of drugs for personal use is legal there is still widespread illegal drug dealing on the supply side.

People already have Police protection from being assaulted regardless of who they borrow from. My point is that the kind of person who is willing to break the interest cap law may also break your kneecap when you don't pay. Organised crime and loan sharking go hand in glove in many overseas countries including the UK. They will be in like a shot for those 400% returns once you take the (semi?) legitimate players out.

 
At 6/9/08 7:54 am, Blogger Alastair said...

THE ANT AND THE GRASSHOPPER

OLD VERSION:
The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.
The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.
Come winter, the ant is warm and well fed. The grasshopper has no food or shelter, so he dies out in the cold.

MORAL OF THE STORY:
Be responsible for yourself!

MODERN VERSION:
The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.
The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.
Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others are cold and starving.
TV1, TV3 and Maori TV show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food. New Zealand is stunned by the sharp contrast.
How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so?
Kermit the Frog appears on Good Morning with the grasshopper, and everybody cries when they sing, 'It's Not Easy Being Green.'
Sue Bradford stages a demonstration in front of the ant's house where the news stations film the group singing, 'We shall overcome.'

Gordon Copeland then has the group kneel down to pray to God for the grasshopper's sake.
Michael Cullen exclaims in an interview with John Campbell that the ant has gotten rich off the back of the grasshopper, and both call for an immediate tax hike on the ant to make him pay his fair share as the ant is too much of a "Rich Prick."
Finally, the Labour Party drafts the Economic Equity & Anti-Grasshopper Act retroactive to the beginning of the summer.
The ant is fined for failing to hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the government.
Winston gets his old law firm to represent the grasshopper in a defamation suit against the ant, and the case is tried before a panel of judges that Helen appointed from a list of single-parent welfare recipients.

The ant loses the case.
The story ends as we see the grasshopper finishing up the last bits of the ant's food while the government house he is in, which just happens to be the ant's old house, crumbles around him because he doesn't maintain it. The ant has disappeared in the snow.
The grasshopper is found dead in a drug related incident and the house, now abandoned, is taken over by a gang of spiders who terrorize the once peaceful neighborhood.

MORAL OF THE STORY:
Be VERY careful how you vote in 2008!!

 
At 8/9/08 2:00 pm, Anonymous Anonymous said...

Excellent story!

NS

 
At 8/9/08 4:08 pm, Anonymous Anonymous said...

Yawn. Good story, much repeated. As is usual, it was written over ten years ago by someone a lot smarter than any of you twits. I'll bet some of you have copied it as original already though.

I see you managed to cut and paste in the names of some current politicians Alastair. Unsurprisingly, your additions are poor in comparison to the original piece. Are you even able to name the author you're plagiarising?

 
At 9/9/08 10:29 am, Anonymous Anonymous said...

Apologies to alastair for that last post, please ignore. I was piqued when I wrote it. Would remove it if I could.

 

Post a Comment

<< Home