To hope that the CofE can kill off Wonga, but think they might struggle?

[ShadeofViolet]

BBC Link

I would love to see an end to Wonga, but we already have credit unions, I dont know how we can change the culture.

IIRC, with our credit union, you have to save first, then you can borrow. Maybe that is what is putting people off.

[edam]

'Loan sharks are a different kettle of fish' - Justin Welby on the Today prog.

He was making a serious point, that if you ban stratospherically high interest rates, payday lenders may shrug their shoulders and move on to do business elsewhere, leaving the desperate easy prey for loan sharks.

Rob, plenty of people on this country are struggling in the economic downturn. Plenty of people have less than they need to live on and are turning to food banks because they don't have enough left after paying rent/bills/transport to minimum wage/zero hours contract jobs. Plenty of people have no hope of saving anything, and have already run through any savings they built up before their employer went bust or laid people off.

If you aren't in their shoes, count yourself lucky. All it takes is one serious accident or being unfortunate enough to develop a serious illness, or your employer going bust, and you might join their number.

That's why he was suggesting the church should help credit unions, co-operatives that lend money at reasonable rates.

The government has abolished the Social Fund that gave people on benefits access to short term loans in an emergency - if your cooker breaks down, for instance, or your water pipes develop a leak, or there's a fire and all your furniture is lost - even Rob would realise you need to replace your children's beds, I hope.

[Rhino71]

Would love to have seen the look on Justin Welby's face when he was told the CofE are an indirect investor or Wonga.
Think someone in the banks Ethical investment department might have to pray for forgiveness today.. or at least pray he still has a job.!

[ParsingFancy]

Yy, edam, the removal of Social Fund loans - which presumably had an almost 100% payback rate - is a huge bonus for Wonga and their ilk.

[Lazyjaney]

Think someone in the banks Ethical investment department might have to pray for forgiveness today.. or at least pray he still has a job

Rendering mammon unto God is a difficult circle to square.

[Rosieres]

As for the church being an indirect investor in Wonga, I suspect any of us paying into a pension scheme will have all sorts of investments that we might not approve of in the cold light of day. And the church has several thousand employees and many retired staff to support through its pension schemes. There are many different funds who own companies who invest in schemes that fund other firms, etc. etc.

At least the church is pointing out the problems of Wonga and planning to provide an alternative through the credit unions.

[JugglingFromHereToThere]

But they have people specifically responsible for checking out the ethics of all their investments Rosieres - someone or many people made some bad decisions on that, and I don't think anything you've said really excuses that fact

(ie yes, they have pensions to provide, but surely can also do so ethically?)

[rob99]

Edam. If someone is desperate for a couple of hundred pounds then borrowing it off Wonga and paying back £250 after 2 months to me is a ridiculous way to run your financial affairs.

The point being that if someone can afford to service a pay day loan that carries several thousand % interest, then they can save a few quid in the first place that equates to the interest alone. The sob story about circumstances people find themselves in can surely only be made worse by a very expensive short term loan....it's financial suicide.

[ParsingFancy]

By your reasoning, Rob, no one would ever need loans from any source, because they'd just save up.

Unfortunately there's no law in life that says the car can't fail it's MOT until you've saved up from repairing the boiler.

[ParsingFancy]

And yes of course it's highly inefficient to borrow and pay interest.

So much more efficient to be well-off in the first place and just write a cheque for both the boiler and the MOT. Being rich is generally a wonderful way to run your financial affairs! You can get so many things so much cheaper.

[ParsingFancy]

(There is no apostrophe in "its MOT". That was merely an optical illusion. It didn't happen.)

[Rhino71]

Rob - the majority of people who use Payday loans do not pay thousands in APR, they simply pay it back a few days or weeks later when they are due at a cost far cheaper than any bank.

£100 wonga over 2 day = £107

£10 over your overdraft at a bank for 2 days = £25 to £50 charges.

[PostBellumBugsy]

I don't know how anyone can defend these loan companies. They are taking advantage of desperate people in the same way old fashioned loan sharks did.

Rhino if you borrow £100 from Wonga for a month then you pay £42.43 to them for that. Not far half off what you borrowed.

If you have an authorised overdraft, then the charges are considerably less. Moneysupermarket have a table showing the charges for up to £500 overdrawn. Halifax is the most expensive on one of their accounts at £25 for the month, but most banks come in at under £10 - so very significantly less than Wonga.

[Rhino71]

I am not trying to defend them. The 42.43 you quote is for 35 days, that?s not how they should be used. If you look at true short term ( less than 10 days) then they are cheaper than the banks.

Bank overdraft fees may be £25 for the month, it?s the massive fees the banks charge for going over your agreed limit, even £5 over your agreed limit will incur a minimum charge of £25 ( £25 per day in some cases). Obviously it is not advisable to go over your limit but hey that?s life people do, the fines for going slightly over are completely disproportionate to any cost that banks may incur.

[PostBellumBugsy]

Rhino - agree that disproportionate overdraft fees are wrong too.

The best thing would be to better educate people about managing their finances. The lower your income the more careful you have to be about managing, but people of all incomes could do with education. My preferred solution would be to see a domestic financial management module taught at schools. Unless you have clued up parents who pass on their wisdom, it is possible to be unleashed on society at 18 utterly clueless as to how to manage your finances.

Maybe I should do a Jamie Oliver and start a campaign about it, like he did about food & school lunches!

[Rhino71]

Completely agree with PostBell. Until schools start teaching children about managing finances, then the situation will only get worse. Schools should not only be about traditional academic subjects, but about teaching children life skills required when they leave education

[LibraryBook]

This isn't a job for the Church of England, this is a job for government.

I wonder if having a Credit Union account which is held on church premises, will satisfy the church attendance requirement for faith schools?

[Fillyjonk75]

I think it's a great idea for the church to help with credit unions, especially with an ABC from the financial sector, but it is something the Govt should be doing.

Basically Wonga and their like are a free way of getting rid of loan sharks, getting the police involved to break up organised crime is expensive, letting fat cats profit from the poor is a very Tory way of doing things. It may be slightly better than people getting their kneecaps broken for not paying, but only slightly.

My worry with the C of E getting involved is that this ABC is looking for any way to increase their powers and influence. Here's a little loan, and is Jesus in your life? I mean yes, it's the C of E, not some extremists, but I still think you have to be aware and keep an eye on them. I wouldn't be so bothered if they were disestablished, no bishops in HOL, had no influence in schools, and there was no such thing as a faith school. But, especially after the revelation that the C of E is going to be allowed to take over many currently non-denominational (not secular, as this is not allowed in this country) schools it does make me more cautious.

However, at the same time it did piss me off that the agenda suddenly went from focusing on Wonga and their like and how evil they are compared with credit unions, to how evil the church apparently is for having a very minor investment in Wonga themselves.

[Fillyjonk75]

Yes, I agree. An interesting chat all the same. The ABC is a consummate politician though, not like the highly educated, very nice and well meaning but naive bumblers they've had in the post before.

[BlueOrange]

I am with this organisation //www.ansarfinance.com/#!how-it-works/c1ger

They do not charge interest on loans but of course have procedures in place where they ensure that people are able to pay back loans. Don't know if this will help someone, but for what its worth, I have been with this company for a number of years and donate £10 a month which goes towards lending out money for small loans interest free.

They also used to have a similar home finance scheme but unfortunately that is at a standstill at the moment as there isn't enough investment to keep that one going.

I realise that it is a company based on islamic concepts, but I am certain it is open to all. Hope the link helps someone.

[BlueOrange]

Hi crescent, I have been with them for a number of years and basically donate £10 so that it can help those in need of a loan and also because one day I may also need a small loan.

[GrimmaTheNome]

That's the sort of thing I was wondering about upthread. Thanks!

[rob99]

Rhino71, you've accidentally hit on one of my bug bears there. "You teach a kid life skills for when they leave education".....trouble is, the majority of teachers have never left education themselves so what life skills outside education do the teachers know about ?

I've been to parents evening to see teachers who act like teenagers. One doodled little pictures on her note pad as she spoke to us, never looking up at us once. I've worked in many schools (not as a teacher) and most of the teachers are incredibly disorganised and shoddy in how they communicate and their general housekeeping.......is it any wonder the younger generation can't save......they only know Cash Converters and Wonga !