Poetry award – Sound Zine http://soundzine.net/ Tue, 07 Sep 2021 10:40:33 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://soundzine.net/wp-content/uploads/2021/09/cropped-icon-32x32.png Poetry award – Sound Zine http://soundzine.net/ 32 32 CFPB to Relax Strict Pending Payday Loan Rules https://soundzine.net/cfpb-to-relax-strict-pending-payday-loan-rules/ https://soundzine.net/cfpb-to-relax-strict-pending-payday-loan-rules/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/cfpb-to-relax-strict-pending-payday-loan-rules/ Washington report – The country’s new consumer finance watchdog on Wednesday proposed to significantly ease the stringent pending rules on payday loans and other short-term loans designed to prevent lenders from taking advantage of cash-strapped Americans. Kathy Kraninger’s proposal, who became director of the Consumer Financial Protection Bureau in December after being appointed by President […]]]>

The country’s new consumer finance watchdog on Wednesday proposed to significantly ease the stringent pending rules on payday loans and other short-term loans designed to prevent lenders from taking advantage of cash-strapped Americans.

Kathy Kraninger’s proposal, who became director of the Consumer Financial Protection Bureau in December after being appointed by President Trump, would remove key provisions requiring lenders to determine whether borrowers can repay short-term loans.

For memory :

1:00 p.m. 6 February 2019

An earlier version of this article indicated that new salary rules for Obama candidate Richard Cordray had been proposed. In fact, they were enacted and were to come into effect in August.

Financial industry officials pushed to change the rules and applauded the announcement. Consumer advocates have called it a “gift to payday loan sharks.”

The bureau’s proposal to revise the rules “suggests there was insufficient evidence and legal support for mandatory underwriting arrangements.” adopted in 2017 as Obama Richard Cordray, according to an office Press release. These would be the first federal payday loan rules.

Kraninger also wants to postpone the effective date of the repayment capacity provisions, set for August, to November 2020. However, the office decided to move forward in August with the implementation of the rest of the provisions. 2017 rules pending a Texas court ruling that had delayed all of the regulation. The other rules set new limits for lenders who withdraw payments from customers’ bank accounts.

“The bureau will assess the comments, weigh the evidence, and then make a decision,” Kraninger said of the rule review effort, which begins with a 90-day public comment period. “In the meantime, I look forward to working with other state and federal regulators to enforce the law against bad actors and encourage strong competition in the market to improve the access, quality and cost of credit. for consumers. “

The repayment capacity provisions “would impose substantial burdens on the industry, severely limit product offerings from lenders, and severely restrict consumer choice and access to credit” in states that allow payday loans and other short-term loans, such as those secured by a vehicle title, according to the Regulatory Proposal Office’s notice released Wednesday.

Payday loans are allowed in California and 32 other states, with the rest banning them.

It is estimated that 12 million Americans take out payday loans each year from websites and approximately 14,000 stores. Loans are typically cash advances of a worker’s salary for two to four weeks and have a flat fee of 15% or an interest rate that doesn’t seem particularly high.

But costs can quickly add up if the loan is not repaid, and the effective annual interest rate is actually 300% or more.

Rules passed in 2017 would require payday lenders to pre-determine the ability of potential borrowers to repay short-term loans of 45 days or less. If the short-term loan period expires and the debt is not repaid, borrowers may face painful charges or be forced to refinance the loan, creating what consumer advocates see as a debt trap. .

The ability to pay provisions are “the heart and soul” of the new regulations that were drafted after extensive research, Cordray said Wednesday in an interview.

“You have to reasonably assess that these loans will work before you make one,” he said, noting that Congress has put in place similar restrictions on mortgages and credit cards. “Rolling it back would mean exposing hundreds of thousands of people to massive damage of the kind we have documented every day across this country. “

Cordray rejected the argument that the rule would restrict consumers’ access to credit.

“It restricts access to irresponsible credit. It seems like a reasonable step, ”he said. “The industry thinks it will hurt them because they give a lot of irresponsible credit. They make a lot of money with it and they don’t want to give up that money.

The office took several years to craft the rules, so federal law requires detailed reasoning to change them. The bureau explained its rationale for eliminating repayment capacity warrants in a 171-page file that will appear in the Federal Register, and argued for postponing the implementation of the rules in another 29-page document.

Mick Mulvaney, Acting White House Chief of Staff, who replaced Cordray on an interim basis, joined two industry trade groups to get a federal judge in November to postpone the August effective date for the entire rule due to potential changes that he wanted to bring.

Mulvaney received $ 65,750 in campaign contributions from payday lenders when he was a Republican congressman from 2011 to 2017, according to the non-partisan Center for Responsive Politics. Consumer advocates complained he was biased towards the industry, but Mulvaney said he would not be swayed by the contributions.

Kraninger, a former Mulvaney aide in the White House, was appointed by Trump last year to be the permanent director. After being confirmed by the Senate and accepted the post, she said she would not be Mulvaney’s puppet.

A troubleshooting industry trade group complained that the 2017 troubleshooting restrictions would hurt consumers and said it was satisfied, but not entirely satisfied, with Kraninger’s proposal.

“Under the leadership of former Director Cordray, the office took an unbalanced approach to rule making and crafted a rule based on a partisan political agenda,” said Dennis Shaul, Managing Director of Community Financial Services Assn. from America.

But Shaul said he was disappointed that Kraninger left some provisions in place and called for the 2017 initiative to be “repealed in its entirety.”

Consumer advocates said Kraninger’s decision went too far.

“The Kraninger CFPB is giving a Valentine’s Day gift to payday lenders, helping them continue to trap Americans in crippling debt cycles,” said Rebecca Borné, senior policy adviser at the Center for Responsible Lending.

“The payday rule was developed through years of extensive research and dialogue with stakeholders,” said Borne, whose group is part of a coalition called Stop the Debt Trap that supports regulation. “Scrapping it will particularly hurt communities of color, which payday lenders disproportionately target for predatory loans.”

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Help with Coronavirus Finances and Bills https://soundzine.net/help-with-coronavirus-finances-and-bills/ https://soundzine.net/help-with-coronavirus-finances-and-bills/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/help-with-coronavirus-finances-and-bills/ Lowlife scammers are taking advantage of the coronavirus to try to defraud people, especially the elderly and vulnerable. Action Fraud has identified thousands of reports of coronavirus-related fraud, with victim losses totaling over £ 5million. Many of them are online shopping scams where victims have tried to buy products like face masks and hand sanitizer […]]]>

Lowlife scammers are taking advantage of the coronavirus to try to defraud people, especially the elderly and vulnerable.

Action Fraud has identified thousands of reports of coronavirus-related fraud, with victim losses totaling over £ 5million. Many of them are online shopping scams where victims have tried to buy products like face masks and hand sanitizer from scammers. There have also been over 4,400 reports of coronavirus-themed phishing emails designed to trick people into opening malicious attachments or revealing sensitive information.

A common tactic used by crooks is to send messages claiming to come from research groups linked to the Centers for Disease Control and Prevention in the United States or the World Health Organization. Some claim they can provide a list of people infected with Covid-19, which links to a malicious website or asks the victim to make a payment in Bitcoin.

Other common phishing emails include those claiming to be from the government, sending articles about the coronavirus outbreak with links to fake corporate websites, or sending details of investment programs. that encourage people to take advantage of the coronavirus slowdown.

Did you receive a suspicious email? The National Cyber ​​Security Center (part of GCHQ) has launched its new suspicious email reporting service to eliminate phishing scams – all you have to do is forward the suspicious emails to their website. report@phishing.gov.uk email address.

Pensioners targeted by wave of scams

A very common scam during the coronavirus crisis has targeted pension holders, claiming they can access cash quickly if they transfer their pension. And with many people desperate for money, this scam often finds a target – and victims lose an average of £ 82,000 to pension scams. Here’s what to watch out for

  • An extraordinary offer of a free boarding exam. If someone calls you and tells you they are from your retirement company or a financial advisor who offers you a free retirement review, NEVER continue with the call.
  • Someone says he’s calling from your retirement company. If they say they’re from your retirement company, say you’ll call them back, then look up the company’s contact information online or on your police documents. NEVER call a number they gave you. If it is a legitimate call, it will not bother the caller.
  • If you are under 55 and someone calls you to offer you access to your pension, do not continue. You cannot access your pension until you are 55, unless you are terminally ill. Anyone who suggests this is not legitimate.
  • Someone offers to manage your pension. Likewise, if someone asks you to transfer your pension to their business or put it under their management, do your homework on the business before you act. You can check if pension companies or advisers are registered on the FCA Financial Services Registry, a public record that shows details of regulated companies, individuals and other organizations.

Tips to protect yourself against scams

Action Fraud says you can do the following to minimize your chances of being cheated:

  • Watch out for fraudulent messages. This includes not clicking on links or attachments if you receive a suspicious message, and not responding to unsolicited messages or calls that request personal or financial information.
  • Be careful when shopping online. You should always do your research if buying from a company or person you don’t know and trust, and possibly seek advice from a friend or family member first. . If you are making an online purchase, you should use a credit card if possible for additional protection (see our Article 75 to guide).
  • Protect your devices from threats. This always includes installing the latest software and application updates to protect your devices against new threats.

See also MSE Katie’s More than 20 coronavirus scams to watch out for blog to learn more about known coronavirus scams and tips to protect yourself from scammers.

Have you been the victim of a scam?

If you have lost money due to fraudsters, you need to do the following:

  1. Immediately end all communication with them.
  2. Contact your bank to tell them you’ve been scammed and cancel all recurring payments.
  3. Report the scam to the police via the Fraud in action website. You can also call him on 0300 123 2040, but be aware that he has reduced phone service at the moment so wait times may be longer than usual.
  4. If you want individual help, you can contact Advice to citizens Scams Action by phone or online chat.
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What help is offered for household finances? – Forbes Advisor UK https://soundzine.net/what-help-is-offered-for-household-finances-forbes-advisor-uk/ https://soundzine.net/what-help-is-offered-for-household-finances-forbes-advisor-uk/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/what-help-is-offered-for-household-finances-forbes-advisor-uk/ If your financial situation has been affected by the coronavirus – or if you think it might be starting to be – here is a roundup of the help you could ask for. Help with mortgages If you haven’t already taken a mortgage payment holiday, you can request one from your lender until March 31, […]]]>

If your financial situation has been affected by the coronavirus – or if you think it might be starting to be – here is a roundup of the help you could ask for.

Help with mortgages

If you haven’t already taken a mortgage payment holiday, you can request one from your lender until March 31, 2021, according to the directives of the regulator, the Financial Conduct Authority (FCA).

Payment holidays – also known as payment freezes or payment deferrals – are usually issued in three-month increments.

However, you don’t need to take that long if you find that you can make the payments after all. You can also choose to make partial payments on your mortgage, rather than paying nothing, to minimize the build-up of unpaid debt.

If you’re already on three-month mortgage repayment leave and now think you need to extend it, you can ask your lender for a further three-month period, bringing your total payment break to a maximum of six months. .

(If you took less than three months with a previous mortgage payment holiday, you can ask for longer this time to “top up” for up to six months.)

If you are not currently on mortgage repayment leave, but have already taken advantage of it, you will also be able to request additional leave, always up to a maximum of six months.

Since all mortgage payment holidays must end at the latest July 31, 2021.

If you have already had six months of mortgage payment interruptions, you will not be eligible for another deferral. In this case, you should contact your lender to discuss more personalized support.

Keep in mind that here, although the first six months of deferred payments will not be recorded as “missed payments” on your credit report (although this can still affect your future borrowing capacity). ), more personalized help can negatively impact your credit report.

As interest will continue to accrue on any mortgage payments you have missed, payment interruptions should only be taken as a last resort.

You can find more details, including how to request a mortgage payment holiday, on the site FCA website.

Mortgage lenders are not able to impose foreclosures before April 1, 2021 (except in exceptional cases).

Help with credit card and store payments

If you have debts on a credit card or bank card – and you are unable to make the minimum payments – you can request a three-month payment holiday from the supplier until March 31, 2021, if you don’t already have one.

If you are already on payment leave or have already had one, you will be able to “top up” for up to six months.

Any assistance beyond six months will be defined as “tailor-made support” which could take the form of reduced payments, waiver or reduction in interest, or acceptance of a new loan plan. refund.

Again, it’s important to only take time off from paying for your plastic if you really need it. This is because interest – which can be around 18% of the APR for credit cards and much higher for bank cards – will continue to accumulate during payment freezes, costing you more in the long run. .

Help with personal loans and other consumer loans

Besides credit and store cards, the same rules apply to other Consumer credit, too much.

This includes personal loans, catalog credit, auto finance (including hire-purchase and leasing), lease-to-buy, buy-it-now, pay-back, and pawn shop agreements.

All payment holidays must end by July 31.

Help for overdrafts

If you rely on your overdraft for your expenses, things can get expensive quickly. Since the overdrafts were reviewed by the FCA in April 2020, many large banks are now charging interest of around 40% APR.

If you are having difficulty with your overdraft as a direct result of the coronavirus, contact your bank. It may agree on one or more of the following:

  • reduce or waive interest
  • a phased reduction plan for your overdraft limit and your balance
  • transfer the debt overdraft to an alternative credit product on more favorable terms.

FCA advises you to be as “open and honest as possible” about your situation when speaking to your bank, as this will help them provide a solution that best meets your needs.

Help with payday loans and other expensive short-term loans

You will be able to request a one-month payment holiday on any high-cost short-term credit agreement until March, 31st if you are “newly affected” by the coronavirus, according to FCA rules. The lender will not be allowed to charge interest during this period and the leave cannot be extended.

If you’ve ever had a payment holiday, you’ll need to contact your lender for more personalized support. Find out how it works on the FCA website.

Help with household bills

Housing tax : if you are having difficulty paying your council tax due to the coronavirus, or if you are now receiving benefits due to a drop in income, contact your local authority as you may benefit from an interruption or reduction of payment.

However, don’t expect a benchmark answer – each board has its own policy which, in turn, will depend on your particular situation.

Utilities: if you are struggling to pay household bills such as energy, water, and broadband due to the coronavirus, your provider should offer forbearance such as payment interruptions or payment flexibility.

Respective industry regulators have also ordered companies not to cut off energy, water and even broadband supplies if customers are struggling to pay due to the coronavirus.

Insurance payment assistance

The official three-month payment deferrals on “general protection” insurance (such as auto, home, travel, life and health) ended on October 31, 2020.

However, you can always ask for more personalized help from your insurer, which could include a reduction in the level of coverage to reduce premiums or a short-term reduction in monthly payments.

This more personalized support will, however, be reflected on your credit report.

Insurers have also made a commitment to their clients to help them get through the coronavirus pandemic, and these will continue until at least March 19, 2021. For more information, consult the Association of British Insurers’ coronavirus center.

Help for tenants

If you are unable to pay your rent and you cannot come to an agreement with your landlord, check to see if you are entitled to Universal Credit – whose housing allowance part was increased by the government last spring to support tenants during the pandemic.

If you have rent arrears in Wales Where Scotland, you may also be eligible for a low interest or no interest government loan to help pay off what you owe your landlord.

If you still can’t pay your rent, your landlord could evict you. But the rule changes triggered by the coronavirus have made this process much longer.

Homeowners in England, Wales and Scotland will need to provide six months notice, while in Northern Ireland it is 12 weeks.

The ban on deportations in England was extended until May 31st and up to June 30th in Wales, and March, 31st in Scotland.

Citizens Advice estimates that around half a million private tenants in the UK are currently behind on their rent, with one in four having been threatened with eviction or contract cancellation by their landlord.

The average amount owed in rent was £ 730, he said.

Business assistancees

Chancellor Rishi Sunak announced a new tranche of grants, intended primarily for the retail, hospitality and leisure sectors.

If you get into debt

The Government’s Insolvency Department also formulate proposals to broaden the eligibility criteria required to enter into a Debt Relief Order (DRO) – which allows some people with lighter debts to have them written off within 12 months.

If you’re worried about getting into debt, contact a free debt counseling charity such as Stage change for personalized support.

If you are in debt or looking for debt advice, always stay alert and beware of scams.

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Attorney General James releases list of top consumer complaints to mark National Consumer Protection Week https://soundzine.net/attorney-general-james-releases-list-of-top-consumer-complaints-to-mark-national-consumer-protection-week/ https://soundzine.net/attorney-general-james-releases-list-of-top-consumer-complaints-to-mark-national-consumer-protection-week/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/attorney-general-james-releases-list-of-top-consumer-complaints-to-mark-national-consumer-protection-week/ Numerous major frauds in New York in 2020 reported to the OAG focused on COVID-19 AG James publishes advice on how to avoid COVID-19 scams, Urges New Yorkers to Report Fraud Immediately to the OAG New York – New York Attorney General Letitia James kicked off National Consumer Protection Week today by posting a list […]]]>

Numerous major frauds in New York in 2020 reported to the OAG focused on COVID-19

AG James publishes advice on how to avoid COVID-19 scams,
Urges New Yorkers to Report Fraud Immediately to the OAG

New York – New York Attorney General Letitia James kicked off National Consumer Protection Week today by posting a list of top consumer scams against New Yorkers in 2020 – many of which were linked to coronavirus disease 2019 (COVID-19) public health. crisis – in addition to a variety of tips on how New Yorkers can avoid COVID-19 scams in the future.

“The devastation unleashed by the COVID-19 pandemic, in addition to the many other ways consumers were defrauded in 2020, unfortunately led my office to receive a record number of consumer fraud complaints in 2020,” said Attorney General James. “The consumers who have helped identify and report issues to our office have been invaluable partners in our efforts to end deceptive scams and will continue to be critical partners in the future. I urge all New Yorkers to follow these tips to minimize the risk of being a victim of fraud, but, in the event of fraud, my office will continue to fight to protect New York consumers.

The nature of the complaints received by the Office of the Attorney General (OAG) in 2020 reflected the serious harm caused to consumers by the COVID-19 pandemic. After analyzing consumer complaints received statewide throughout 2020, the following turned out to be the top 10 consumer complaints by category:

Number of complaints
Internet (internet services and service providers, data privacy and security, digital media, data breaches, internet manipulation fraud)
9 832
COVID-19 price gouging (online and brick-and-mortar increase in the prices of items such as hand sanitizer, masks, gloves, toilet paper, food)
Owner / tenant disputes (bail release, tenant harassment)
2 752
Health clubs (continuous billing of fees during club closures, inability to cancel memberships, refunds not provided, no response from clubs)
Car (sales, service, financing, repairs)
Consumer services (security systems, technical repairs, immigration services, vocational training)
Retail sales (any sale of goods: food, clothing, hire purchase, online orders)
Credit (debt collection, credit card billing, debt settlement and relief, payday loans, credit repair, credit reporting agencies, identity theft)
Utilities (cordless and residential telephones, energy services and providers, cable and satellite)
To travel (inability to cancel or no refund for cancellations required by COVID-19 travel restrictions)

Attorney General James also offered the following tips to consumers that they should practice to minimize the risk of themselves or their family members falling victim to COVID-19-related scams in the future:

Vaccine-related scams: The COVID-19 vaccine is NOT currently available to the general population in New York. A full list of groups eligible for a COVID-19 vaccine is available on the New York State Department of Health website. Consumers are cautioned to be wary of offers promising quick or expedited access to the vaccine for a fee. These offers – which can be delivered by text, phone or email – are NOT legitimate. Con artists can pose as public health officials from organizations such as the Centers for Disease Control and Prevention (CDC) or the World Health Organization (WHO). Fraudsters can also offer to ship a COVID-19 vaccine directly to homes, provide special access to vaccines or clinical trials, or sell special cold storage devices to keep vaccines.

New Yorkers are urged to use the following tips to avoid vaccine scams:

  • Beware of anyone calling or emailing vaccine offers, and don’t give out Social Security numbers, personal credit card numbers, or bank account information. No one from a vaccine distributor, healthcare company, or private insurance company will ask for this information.
  • No New Yorker should be charged out of pocket – whether or not they have insurance – for a vaccine as long as the pandemic remains a public health emergency. If a New Yorker has to pay anything, including an administration fee, they have to file a complaint on the OAG website.
  • No one can pay to put their name on a list to get the vaccine or to participate in a vaccine clinical trial.

Fake vaccine cards: Consumers are cautioned to beware of fake vaccination cards sold on social media platforms or other areas of the internet. Vaccination cards usually record the date a vaccine was administered, the vaccine manufacturer and the lot number, and are provided by the vaccination site for the consumer’s own records. The target market for these fake cards may be people who wish to avoid the vaccine or who mistakenly believe the card is necessary for travel or for other purposes. Fake vaccination cards pose a risk to public health and should NOT be purchased for any reason. Information provided by consumers can also be used for identity theft.

Fake COVID-19 remedies: The bad actors have marketed a line of products with false claims that they can prevent, cure or treat COVID-19. Consumers should NOT spend their money on these products, which do not work. The fake products sold range from colloidal silver products and toothpaste, to dietary supplements and herbal mixtures. Consumers should make health-related decisions in consultation with their health care providers. Attorney General James has sent numerous cease and desist letters to people and entities peddling these fake and potentially dangerous COVID-19 products, including to Alex jones, The Silver Edge Company and Dr Sherill Sellman, among others.

Abusive prices: Consumers and the general public are cautioned to pay attention to the prices charged on goods and services that are vital to their health, safety or well-being, including hand sanitizer, toilet paper, medical supplies. basic and basic food products. New York’s predatory pricing law prohibits the sale of such goods and services during times of abnormal market disruption at an unreasonably excessive price. In addition to sending over 1,900 cease and desist letters to merchants over the past year demanding an end to price increases, OAG arrested three third-party sellers who used Amazon to raise prices for hand sanitizers and sanitizers. The OAG also sued a major egg distributor for abusing the price of 4 million cartons of eggs..

Health clubs: Consumers are reminded to know their rights. New York Health Club Act Allows Gym Members To Cancel Membership Under Certain Circumstances, including ‘after the services are no longer available or practically available as provided for in the contract due to the [gym’s] permanent cessation of operation or substantial change in operation ‘ and requires gym owners to provide pro-rated monetary refunds (NO credits) for such cancellations within 15 days. In addition, the law further prohibits misrepresentation of consumers’ cancellation rights. The OAG sued the parent company of two major health club chains – New York Sports Clubs and Lucille Roberts – in New York for violations of the health club law.

Puppy Scams: The pandemic has dramatically increased demand for pets as New Yorkers seek companionship during the lockdown. Scammers typically pretend to be ranchers and refuse in-person meetings, using COVID-19 security protocols as an excuse. At the same time, these scammers demand additional fees, such as shipping pets in special “protection” crates or pandemic insurance.

New Yorkers are urged to practice the following tips to avoid puppy scams:

  • Use a credit card to make the purchase and avoid wire transfer, send gift cards, or send money using apps as these transactions cannot be refunded and are not traceable.
  • Do a thorough internet research for the breeder before purchasing a puppy to make sure that the email address used is not the same one used on several websites and that testimonials are not copied from other legitimate websites.
  • Visit the breeder and the puppy in person, respecting social distancing. If a consumer is unable to do so, they should ask the breeder to video chat with them. Consumers are strongly advised not to purchase a puppy without visual confirmation. Consumers should also make sure to get visual confirmation before making any type of deposit. Consumers should insist on seeing where animals are kept and avoid breeders who offer to meet in a “convenient” public place.
  • Keep in mind that shipping young animals long distances, especially as air freight during the hot summer months, comes with many risks. It is strongly recommended that the puppy be picked up in person and brought back under the passenger seat in a carrier. Be careful, scammers usually use a number of shipping-related excuses to get more money from consumers.

In the event that a consumer is the victim of fraud, they must ensure that they keep all records of the sale, including advertising and written communications.

Consumers can learn more about COVID-19 resources and scams on the OAG website. Attorney General James reminds consumers that in addition to being vigilant, they must report fraud cases to his office. Consumers are encouraged to file a complaint by completing and submitting a Office of Fraud and Consumer Protection online complaint form or by calling (800) 771-7755 if they are unable to submit a form online.

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Cost of living: Instagram influencer shares tips for paying off debts https://soundzine.net/cost-of-living-instagram-influencer-shares-tips-for-paying-off-debts/ https://soundzine.net/cost-of-living-instagram-influencer-shares-tips-for-paying-off-debts/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/cost-of-living-instagram-influencer-shares-tips-for-paying-off-debts/ Faced with debts of over $ 50,000, a 29-year-old Brisbane woman now has almost enough savings for a house deposit. In the age of buy it now, pay late, payday loans and easy credit, the number of Australians drowning in debt is on the rise. Personal debt skyrocketed to nearly $ 3 billion last year […]]]>

Faced with debts of over $ 50,000, a 29-year-old Brisbane woman now has almost enough savings for a house deposit.

In the age of buy it now, pay late, payday loans and easy credit, the number of Australians drowning in debt is on the rise.

Personal debt skyrocketed to nearly $ 3 billion last year and, according to Reserve Bank of Australia payment data, $ 205 million in new debt was added to credit card balances just in December.

But a group of money-savvy Australians are turning their backs on debt and using social media to share their financial successes and inspire others to write off their debts.

One of those who have made a name for herself in this thriving online community is a Brisbane-based mother of two who has paid off $ 60,000 in debt, created an emergency fund and saved most of a house deposit in four years. All with an income of less than $ 50,000.


The 29-year-old influencer – or “fin-fluencer” – who goes by the handle @aussiedebtfreegirl on Instagram and YouTube began her mission to free herself from debt as she was expecting her second child.

“I have always hated debt and have been a strong believer in frugality,” she shares. “My partner and I met in December 2015, we had a baby on the way and we were trying to start a life together.

“We had a conversation about what we both wanted in life and how we could never have it while carrying all this debt.”

The conversation motivated the Brisbanites to take over the couple’s finances in an effort to pay off everything they owed, including utility bills, personal loans, phone bills and car accident debt.

“We scrimped and saved and threw every extra dollar we could on debt. Pay them off and shoot them one at a time. We made so many random $ 5 payments just to keep it down. ”

In addition to taking on additional chores, she cut household bills by looking for everything from reviewing energy suppliers every few months to leveraging loyalty and rewards programs.

The mother-of-two also used the WeMoney financial management app, which helped her see all of her bills in one place, so she could set a monthly budget and goals from there.


Even though the couple skimped, they still managed to have fun, although they always made sure it was cheap.

Date nights consisted of discounted sushi, where each plate cost less than $ 4, a romantic stroll and cuddles on the couch, while family fun consisted of grabbing take out and heading to the park. for a picnic and a play with the kids, now aged four and Seven.

“Some of our favorite things cost next to nothing. Our only rule is that if we want to do something, we have to like it.


In addition to focusing on paying down their debt, the couple found new ways to increase their income. Starting with a modest combined income of $ 20,000, the couple slowly increased their earnings each year before finally ending up with $ 50,000.

“We have worked hard. In between jobs, my partner did landscaping and was a handyman while I cleaned and refurbished furniture, flipping items for sale online.

“I would have paid off the debt sooner if we hadn’t had some emergencies,” she says. “It took me four years due to low income and a single life, job losses and emergencies that occurred as we went along.”

These crises, namely the breakdown of her partner’s car – essential for her work as a trader – prompted her to focus on building up an emergency fund in conjunction with conquering their debt because “he There’s no point in paying down debt if the next emergency is just happening. to undo all that hard work.

RELATED: Weird electrical habits that cost thousands


Once released from her debts and provided with an emergency fund, Emily focused on saving for a house deposit and saved some of it when another emergency arose. Her son fell ill, and in the months it took for him to be diagnosed, his cash reserves were depleted by appointments with specialists, medication, hospital parking, sick leave. caregivers and childcare for her daughter.

However, she remains philosophical on this subject. “I’m not going to lie, I was upset when I saw those five digits drop to zero, but this is real life, this is personal finance, things are going to happen that you need to spend money on. money, ”she said.

“You’re not always going to hit those big, bold goals, you can’t be too rigid or upset about it, life is coming. I just reset and think ‘I can do it again’.

RELATED: How to choose family health insurance


Emily believes that anyone can pay off their debt, no matter how small, if they are just willing to tackle it head on.

“If you’re in debt, don’t hide it. List the debts you have, the interest rates and fees that go with it, then pick one to focus on and crush it, ”she advises.

“I recommend starting with the smallest because not only does that prove you can do it, but you can also carry that minimum payment over to the next debt and it snowballs from there.”

Now back to focusing on that house deposit so that they can secure a mortgage, a debt that Emily believes is “a part of life,” she is more dedicated than ever to being thrifty.

“It’s a lifestyle choice for us, even if we had more money to come, I would still be thrifty. At the end of the day, we don’t want to work indefinitely, so we have to stick to a budget as much as possible.

RELATED: 3 crucial dates Australians need to know

Read related topics:BrisbaneCost Of Living
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CFPB revokes payday loan restrictions designed to protect borrowers https://soundzine.net/cfpb-revokes-payday-loan-restrictions-designed-to-protect-borrowers/ https://soundzine.net/cfpb-revokes-payday-loan-restrictions-designed-to-protect-borrowers/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/cfpb-revokes-payday-loan-restrictions-designed-to-protect-borrowers/ Getty The Consumer Financial Protection Bureau (CFPB) will now make it easier for payday lenders to extend short-term, high-interest loans to customers who may not be able to repay them. The office’s final review of an Obama-era rule is provoking heated reactions from consumer advocates and members of Congress. CFPB rejects Obama-era payday loan rule […]]]>

The Consumer Financial Protection Bureau (CFPB) will now make it easier for payday lenders to extend short-term, high-interest loans to customers who may not be able to repay them. The office’s final review of an Obama-era rule is provoking heated reactions from consumer advocates and members of Congress.

CFPB rejects Obama-era payday loan rule

The CFPB released its latest revision of a 2017 payday loan rule on Tuesday. The revision removes a provision requiring payday lenders to prove that customers can afford to pay off a short-term loan in full within two weeks. The process used to determine the affordability of payday loans was similar to the underwriting processes required by banks to determine whether customers can afford mortgages or other long-term loans.

“Our actions today ensure that consumers have access to credit in a competitive market, have the best information to make informed financial decisions and maintain key protections without impeding that access,” said CFPB Director Katy Kraninger, in a written statement.

Payday loans are high interest rate loans marketed as short term loans for people who need cash to hold them until their next paycheck. In theory, a consumer should be able to fully repay the loan on their next payment, but this is rarely what happens.

Payday loans come with confusing terms that often add up to extremely high, usually triple-digit interest rates called “true annual percentage rates.” For example, these loans usually come with monthly maintenance fees and origination fees which are then added to their annual interest rates.

Average interest rates for payday loans vary, as each state regulates these types of loans differently. A typical payday loan in Texas, for example, has an interest rate of 661%, according to the Center for Responsible Lending; in Oregon, the interest rate is 154%.

Consumer advocates respond to revised CFPB rules

Consumer advocates say the new CFPB revision is damaging American consumers.

“In this time of health and economic crisis, the CFPB has mercilessly embraced an industry that charges up to 400% annual interest and deliberately grants loans that put people in a debt trap,” said Lauren Saunders , Associate Director of the National Consumer Law Center. (CLB). The CFPB has no basis to gut the heart of common sense protections that simply required payday lenders to do what responsible lenders already do: ensure the borrower has the capacity to repay.

Almost 12 million Americans take out a payday loan each year, with the typical borrower earning only $ 30,000 per year. According to the Center for Financial Services Innovation, about 58% of payday loan borrowers have difficulty meeting basic monthly expenses such as rent and utility bills.

Payday loans are seen as a viable source of credit for low income consumers who do not qualify for loans at better rates. But these borrowers often find themselves trapped in a vicious cycle of payday lending. Three quarters of all payday loans are taken out by borrowers who have took out 11 or more loans in one year, and most of the renewed loans are subscribed within two weeks following the reimbursement of a previous one.

The Pew Charitable Trusts, which has a dedicated consumer credit team, also criticized the CFPB’s decision.

“The 2017 rule worked. Lenders were starting to make changes even before it officially took effect, safer credit was already starting to flow and bad practices were starting to fade away, ”said Alex Horowitz, senior research manager for the project. Pew Consumer Credit. in a written statement. “Today’s action puts all of this at risk.

Trump administration targets other financial and regulatory rules

The revised CFPB rules are one of many regulatory changes under the Trump administration that give consumers more choice or less protection, depending on who you ask.

The administration previously relaxed regulations on the financial services industry by overturning the Obama-era fiduciary rule and recently replacing it with Regulation Best interest, which some advisers say doesn’t do enough to protect consumers from conflicting financial advice from brokers, who make commissions based on certain recommendations. Proponents say this gives consumers more freedom to choose a broker based on their needs.

In addition, the CFPB has suffered a long legal battle in recent years. The Trump administration has long argued that the office is too powerful by having a director who can only be removed for certain wrongdoing. Last week, the Supreme Court ruled that the director of the CFPB can be sacked at will, but the office itself is here to stay.

In April, the New York Times published a report claiming that the CFPB manipulated its own research process to help justify the payday loan rule review. Senator Sherrod Brown (D-OH), Senior Member of the US Senate Committee on Banking, Housing and Urban Affairs mentioned the report in a press release shortly after the CFPB announcement.

“Today, the CFPB gave payday lenders exactly what they paid for by ousting a rule that would have protected American families from predatory loans that trap them in debt cycles,” Brown said. “This new rule – and recent reports that politician appointees have manipulated research to support the new rule – show how far the CFPB, led by Director Kraninger, will go to protect the president’s business cronies. Trump rather than consumers. “

Read more: The real cost of payday loans

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Financial institutions should address their lack of trust with black communities https://soundzine.net/financial-institutions-should-address-their-lack-of-trust-with-black-communities/ https://soundzine.net/financial-institutions-should-address-their-lack-of-trust-with-black-communities/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/financial-institutions-should-address-their-lack-of-trust-with-black-communities/ In the midst of a pandemic that brought black Americans distrust of medical systems in the foreground, another source of mistrust with acute consequences persists: financial institutions. As has been well documented, the current economic crisis has disproportionately impacted Black Americans, who faced higher rates of unemployment, job loss and financial insecurity. A banner year […]]]>

In the midst of a pandemic that brought black Americans distrust of medical systems in the foreground, another source of mistrust with acute consequences persists: financial institutions.

As has been well documented, the current economic crisis has disproportionately impacted Black Americans, who faced higher rates of unemployment, job loss and financial insecurity. A banner year for the stock market has exacerbated racial disparities wealth, stressing that differences in employment and income do not fully take into account the inequalities associated with them.

“LEARN MORE: The student debt crisis hits black borrowers the hardest. These Philadelphia debtors say Biden’s plan to deal with it is not enough.

Federal Reserve survey data consistently shows that black households on average hold less in the stock market than white households. In 2019, the median shareholding for a black household was less than a third of a white household. This chasm corresponds to broader trends in the income gap and the capacity of black households to save.

Long-term data also reveals that black households tend to invest less in stocks – about half. This is true for Black Americans with a university education. And when available, households of color also opt for employer-sponsored retirement plans. less often.

Saving and investing are of paramount importance for building wealth over time, planning for retirement and, possibly, inheritance transmission. Beyond raw asset figures, why does this dichotomy exist?

“There is a level of mistrust of traditional financial services due to predatory lending practices,” says Jason Ray, founder of the Philadelphia-based company. Zenith Wealth Partners. Such practices include payday loans, when creditors provide short-term, high-interest loans (usually less than $ 500) workers who often wait for their next paycheck. High bank overdraft fees, adds Ray, that are disproportionate impact people of color, doesn’t inspire much confidence either.

During Black History Month, when Americans discuss the legacy of racism in this country, the legacy of Jim Crow, the legacy of slavery, we are really talking about a continuing legacy., not just the story: redness, or geographic and racial restrictions on financial services, resulting in decades of disinvestment in some neighborhoods. Rent discrimination (including by a former president). Exclusion of trade unions. These blows add up.

Philadelphia is no stranger to these trends, as one Report 2020 of the municipal comptroller’s office. Historic redlining still has an impact and alters neighborhoods of color, many of which have the highest poverty and homicide rates in the city today.

Yes mistrust plays a role in the wealth gap, how can we encourage sound financial decision-making and market participation of doubtful Philadelphians?

Recent engagements of local businesses, including Comcast and the 76ers, to support communities of color through charitable donations, advertising airspace and a program to encourage the purchase of Black-owned businesses will help. Such goals are especially important for black-owned businesses in Philadelphia, a number much too small which needs institutional support to develop. If these efforts are successful, confidence in the larger financial systems should follow. But that’s a big if.

“Businesses,” says Ray, “need to coordinate with community organizations.” Charitable contributions must be well tracked and transparent. The most important ? “Meet people where they are. It can be through youth organizations, churches or premises charitable foundations.

“LEARN MORE: Black Philadelphia tenants face eviction at more than twice the rate of white tenants

We need to make sure that promises aren’t just promises, that responsibility matters. The money must stay and awareness must be localized – $ 100 million only counts if the right people have access to it and, more importantly, have options for where to take their newly available resources.

However, promoting top-down financial literacy and strengthening the links between institutions and consumers cannot go further. Awareness efforts must start at the bottom. Because the stakes are so high in financial planning, it helps to have community members who can address specific concerns and hesitations. Ray says it clearly: “The consulting industry is about trust.

A member of Association of African American Financial Advisors, Ray is part of another unbalanced ratio. According to Bureau of Labor Statistics, among workers classified as “personal financial advisers” in the United States, white advisers are 10 times more numerous than black advisers.

Go forward, local financial institutions must move that needle by hiring people of color and reaching out to universities for representative recruitment. Philadelphia is a college town and a city with a majority of people of color. It shouldn’t be that hard.

Matthew Jeffrey Vegari is an economics writer and researcher who previously worked for the City of Philadelphia as a political associate.

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Why personal debt looks healthy despite the worst year for jobs https://soundzine.net/why-personal-debt-looks-healthy-despite-the-worst-year-for-jobs/ https://soundzine.net/why-personal-debt-looks-healthy-despite-the-worst-year-for-jobs/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/why-personal-debt-looks-healthy-despite-the-worst-year-for-jobs/ California experts say mainstream indicators have failed to capture the true toll of the pandemic, warning of a much more complicated – and uneven – debt history. On paper, the Golden State appears to have escaped 2020 without a personal debt crisis. Despite an unprecedented 2.4 million jobs lost in the spring, Californians joined with […]]]>

California experts say mainstream indicators have failed to capture the true toll of the pandemic, warning of a much more complicated – and uneven – debt history.

On paper, the Golden State appears to have escaped 2020 without a personal debt crisis. Despite an unprecedented 2.4 million jobs lost in the spring, Californians joined with fellow Americans in paying off interest-heavy debts such as credit card bills while acquiring wealth-building loans by taking out mortgages. In California, new mortgages have jumped ten% Even like house prices have skyrocketed, suggesting unexpected resistance to a protracted pandemic.

Economists and financial researchers across the country see no telltale signs of financial trouble in the Federal Reserve Bank of New York reports consumer debt, such as devastating spikes in defaulted debt, bankruptcies and foreclosures during the Great Recession. In fact, they are seeing near record lows.

But appearances can be deceiving.

The large gains of affluent Californians seem to mask the experiences of suffering segments in debt records that are not easily broken down by race, income or geography. Additionally, millions of Californians experiencing job losses have racked up crippling debt levels that go unrecorded in many national metrics: unpaid rent, utility bills, borrowed money from loved ones and, in some cases, predatory loans.

The opacity of the debt data poses a problem for the government’s response. Even in california extends an eviction ban, considering additional stimulus aid and press for additional unemployment assistance, it is not known whether this relief will be sufficient to prevent a debt crisis or simply postpone it.

“Once the dust settles, it will be a story of inequality,” said Matthew Harding, professor of economics and statistics at UC Irvine.

A counter-intuitive trend

Economic city centers usually trigger high levels of debt distress.

“Debt is what fills the void,” said Taylor nelms, senior research director at the Filene Research Institute, a national think tank working with hundreds of credit unions.

After the 2008 financial crisis, credit card debt skyrocketed. The same goes for the part of American borrowers who are in arrears on their debts, which can hurt credit scores. At the end of 2009, around 12% of US household debt was in arrears, the highest rate ever.

Yet this is not happening now, despite the United States lose more jobs in 2020 that were lost overall Great recession.

A rate below the average of 3.4% of Americans’ personal debt was in arrears at the end of September. California, one of the states hardest hit by delinquency in the Great Recession, now has the lowest rates in the country, according to an interview with researchers at the Federal Reserve Bank of New York.

In another surprising twist, U.S. credit card debt – which, unlike mortgages, economists often consider an unhealthy form of debt because it doesn’t create wealth – fell $ 76 billion in the spring, falling the stronger since the country’s banking system began analyzing debt. records in 1999.

It’s a sign, experts say, that Americans are spending less due to travel restrictions, business closures and lost income. But this is also due to the active debt repayments of those who have benefited from additional financial cushioning through increased unemployment benefits and stimulus checks of $ 1,800. About half of Californians who received the latest round of stimulus checks say they mainly used them to pay off outstanding debt, according to January Census Bureau surveys.

How could a disease nicknamed the ‘inequality virus“Not generate alarming signs of household debt?

State of suspension

Maybe it’s just pending. Federal injections of funds helped many people through the year. California lawmakers have banned evictions until the end of June and Newsom has banned water and power cuts during the pandemic. While ensuring access to basic needs during the crisis, these moratoria darken the true level of Californians’ debt problems.

“If the protections were extended permanently, the data would align with reality,” Nelms said.

About 1.6 million Californian households are behind on water payments. Estimates of the number of late rent payments range from 90,000 to 700,000. At some point, these invoices will come due.

Lawmakers have taken steps to reduce past due debts. The federal government, with some private lenders, offered people the option to defer payments on their student loans and mortgages, a process called forbearance. But these relief efforts have also created mixed signals about the state of delinquency in California.

A working paper written by researchers at Stanford and USC, among others, found that Americans were forborne on roughly $ 2 trillion in loans between March and October, including $ 1.1 trillion. came from delayed mortgage payments. Study co-author and USC assistant professor Erica Xuewei Jiang believes this sets a record.

Abstentions largely explain the difference between the 2008 crisis and the pandemic, said Giacomo De Giorgi, director of the Institute of Economics and Econometrics at the University of Geneva in Switzerland, including why the foreclosures – when a lender repossesses a house after the owner has failed to pay the mortgage – have all but ceased.

“We’ve never seen this before,” De Giorgi said. “It is very difficult to know if this is an optimistic image.

A story of inequality

Another reason debt levels look deceptively healthy is growing inequality.

“When we worry about averages, we miss a lot of things,” said Harding of UC Irvine.

The rich are distorting the Fed’s debt measures. For example, people with a credit score above 760, who tend to make more money, are responsible for 85% of the nation’s new mortgage debt boom, taking out $ 329 billion more in home loans since March. . The mortgage balances of borrowers with scores below 620 have declined.

Harding is also concerned that the data, which he says cannot be disaggregated by race, may hide alarming trends among specific demographics.

Ernesto Martinez said he was witnessing “possibly the biggest wealth stripping event of our lives” among the families he serves as director of asset building programs at the Mission Economic Development Agency.

Before the pandemic, the nonprofit helped about 8,000 families, mostly immigrants, who earned an average of $ 30,000 a year in the Bay Area to build wealth through job training, a financial coaching, income tax services and affordable housing.

Now, his team is scrambling to help clients retain “what little wealth” they may have developed.

Desperate debt is not counted

Federal Reserve data also fails to measure some of the more distressing forms of debt, often affecting those who have endured long months without assistance because they are undocumented or their unemployment benefits have been frozen or delayed.

It only counts debtors with social security numbers, excluding undocumented immigrants. That doesn’t include the increase in utilities and rental debt, which “has the potential to be pretty catastrophic,” said Marisabel Torres, California policy director for the Center for Responsible Lending, a non-profit organization. profit that fights predatory loans.

It doesn’t capture the 14% of Californians who told the Census office in January that they borrowed money from family or friends over the past week. This ignores people who turn to high interest financial services, like payday loans or title loans, because they have limited or poor credit histories.

a Google search analysis by the Federal Reserve Bank of Kansas City found evidence that demand for securities and payday loans has plummeted. However, experts fear that these often predatory types of services will skyrocket when financial protections expire. The use of payday loans doubled in the years following the Great Recession, hitting people with limited or poor credit the hardest.

Until recently, Erica Wood of San Diego had dealt primarily in cash, leaving the 44-year-old pharmacology researcher-turned-small-business owner with little credit history.

The pandemic has wiped out Wood’s booming mobile drilling business. Being behind on May’s rent, she became desperate. Through an online lending agency, she took out a title loan of $ 4,000 at an annual interest rate of 400.87%, with her 2015 Lincoln MKZ as collateral. When the end of the pandemic still seemed near, Wood figured she would pay off the loan immediately.

But the pandemic continued, and interest grew faster than she could pay it back. Wood cashed in his 401K, refinanced the loan, sold stocks and a precious classic truck.

She might have paid off the loan sooner, if it weren’t for the chaotic crackdown on fraud by the California Department of Employment Development, which led to Bank of America to freeze its benefits card in September. After countless hours on the phone with representatives, Wood still hasn’t seen a dime of his pandemic unemployment assistance of $ 598 every two weeks.

Two months behind on the loan repayment of the title, she still owes about $ 4,300.

Although Wood’s financial crisis doesn’t show up in the national debt statistics, her boyfriend’s relative success may soon be. An electrician, his annual income rose from about $ 55,000 to over $ 80,000 as the business boomed and he worked weekends.

“He wants to buy a house now because the mortgage rates are so high,” Wood said. “But I’m panicking.”

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Payday lenders in Canada are using the internet as a way to get around the laws https://soundzine.net/payday-lenders-in-canada-are-using-the-internet-as-a-way-to-get-around-the-laws/ https://soundzine.net/payday-lenders-in-canada-are-using-the-internet-as-a-way-to-get-around-the-laws/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/how-payday-lenders-are-using-the-internet-to-evade-the-laws-in-canada/ Canada is taking measures to crackdown on payday lenders. Payday lenders can’t open stores or get business licenses across Canada. These regulations were established to stop payday loan borrowers falling for loans with high interest rates, hidden fees, and other shady practices. Payday lenders online Many payday lenders can get around the municipal level. Regulations. They are simply setting […]]]>

Canada is taking measures to crackdown on payday lenders. Payday lenders can’t open stores or get business licenses across Canada. These regulations were established to stop payday loan borrowers falling for loans with high interest rates, hidden fees, and other shady practices.

Payday lenders online

Many payday lenders can get around the municipal level. Regulations. They are simply setting up an internet payday loan company, where the municipal laws don’t apply. Champion Lender, have full rights to market to Brampton, Toronto, or other Canadians, without municipal oversight. Mon won’t be affected by any laws that apply to payday lenders if they are online only.

Advertisements by payday lenders in a given area of Canada are not always indicative that they exist. This simply means that lenders are targeting Canadian customers. These people are usually low-income and rely heavily on loans to pay their bills, or to fund an emergency fund. These people are vulnerable to predatory lenders online who will try to cheat city regulations to offer them a treat.

Payday loans available anywhere

A payday loan website could be based in one city, province, town or other area. They might not be based there. It is crucial to check the details at the bottom of the page to confirm their exact location. Often, they will not both be from the same area. They will likely be located somewhere with easier loan regulations.

Online lenders may not be licensed in the locality they are located. where they will market their loans to the public. To find out more about the license details of the lender, click the link to the privacy policy/terms of use at the bottom of the lender’s website. Sometimes, the lender might not even be licensed. Only trust licensed businesses in your area.

Canada does not have any laws that prevent payday lenders from being offered in Canada. This means federal agencies can monitor the activities of these companies. This is not always the truth. If enough people have complained, an agency can only investigate an online payday lender. Otherwise, surveillance won’t be taken seriously. Each province in Canada has its own set of rules to protect payday lenders. These rules define the maximum fees and penalties that may apply for a borrower from a provincial. This problem can often be avoided with online lenders who offer many options. Online lenders are able to offer loans to individuals from different parts of the country. They don’t have the same requirements as payday loan lenders within the same area.

Unauthorized lenders

It’s a fact that not all unlicensed lender are known. Unlicensed lenders don’t require you to repay them. Canadian law requires that every lender has a license. So if you default on

Payday loans by unlicensed companies is illegal. They can’t sue you as they already broke the law. They hope that you will pay them interest in the thousands or hundreds.

First, you have to make the payments on the small loan that they provided. Then you can finally see the truth.

Unlicensed lending may allow them to operate from overseas locations such as the Cayman islands. Canadians may think they are dealing with a payday loan lender. They will however be referred at minimum two other lenders.

They visited three websites as part of their troubleshooting inquiry. They are now aware that they are dealing with a foreign lender and do not have to comply with Canadian laws.


Payday loans are not necessarily bad. You should do your research before you apply for one. Research as much information as you can about the lender, as well as the terms of the loan. The lender must be located in Canada and offer reasonable terms.

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How new laws are pushing predatory loan sharks closer to extinction https://soundzine.net/how-new-laws-are-pushing-predatory-loan-sharks-closer-to-extinction/ https://soundzine.net/how-new-laws-are-pushing-predatory-loan-sharks-closer-to-extinction/#respond Tue, 09 Mar 2021 11:34:57 +0000 https://soundzine.net/how-new-laws-are-pushing-predatory-loan-sharks-closer-to-extinction/ Amid fears of growing financial hardship across New Zealand, a global campaign against high-interest lenders appears to be gaining traction. Payday lenders, truck shops, loan sharks: the names alone are enough to conjure grim images of shady operators and con artists hiding in dark spaces to prey on the financially vulnerable. While reality isn’t always […]]]>

Amid fears of growing financial hardship across New Zealand, a global campaign against high-interest lenders appears to be gaining traction.

Payday lenders, truck shops, loan sharks: the names alone are enough to conjure grim images of shady operators and con artists hiding in dark spaces to prey on the financially vulnerable. While reality isn’t always so cinematic, their business models don’t do much to improve common perception.

High cost lenders are known for their opportunistic advertising and for offering quick and easy loans to people, often without ensuring that they are able to repay the money. With interest on loans sometimes reaching 600% per year, debt can easily spiral out of control and destroy lives, pushing people into a deep hole from which it may be impossible to get out.

As New Zealand enters an economic recession and unemployment is expected to peak at 10% next year, there are fears that vast waves of financially struggling households will be seduced by the quick and convenient money from payday lenders. , resulting in crippling debt and widespread poverty.

This is why, a few months ago, the government accelerated a bill to hamper high interest rate loans. The An Act to amend the legislation on credit contracts – which was passed in 2019 but came into effect in May this year – has a number of new restrictions, the most important of which is the interest and fee cap which prevents someone from being charged more than 100% the value of any amount borrowed. This means that if a person borrows $ 500, they will never have to repay the lender more than $ 1,000, including fees and interest.

Payday lenders and trucking shops are also now required to make reasonable inquiries into the financial condition of the borrower to ensure that he is able to repay the loan without significant hardship and that the loan is likely to fall. meet their needs. Truck stores, in particular, must also assess the affordability of customers before selling merchandise on credit.

With violators facing a $ 600,000 fine, the new rules are apparently too onerous for some high-cost lenders, forcing them out of the market since the legislation came into effect. Checkers Finance says on its website that it is no longer issuing loans due to government crackdown, while the pawnshop and payday lender Cash Converters announced in June that it was closing four stores and laying off 80 employees because of the new laws.

As for other payday lenders operating in New Zealand, some have since expanded their models so that they now charge just below the 50% interest that is a high cost loan. Moola, one of the largest in the country, now describes itself as a responsible lender on its website and has applied the interest cap in its loan calculator. Meanwhile, Christchurch-based Save My Bacon argued it was already moving away from payday lending long before the new rules came into effect.

“The company – even before the legislative changes – transformed the business from high cost loans and more to longer term flexible loans with low interest rates,” said Tracey Gillman, CEO of Save My Bacon.

With such changes in the market, the pressure certainly seems to be paying off. However, Tim Barnett, CEO of the financial capability body Fincap, said it is not only the interest cap, but also the power and awareness of borrowers that is influencing the landscape.

“[Payday lenders] relied on people who were wrong and complained and they relied on poor supervision to make their models work, ”he said.

Under the Law Amending the Law on Credit Agreements, borrowers who have obtained unaffordable or unsuitable loans will now be able to claim legal damages under dispute resolution programs, which could include repayment of all debts. interest and costs and compensation for any damage. Lenders are also required to pass a “fit and suitable person” test and submit statistical information about their business to the Trade Commission on an annual basis.

Barnett said these demands along with the government’s serious efforts to raise awareness “are setting a new standard.” The legislation is now very similar to that of the United Kingdom which has been very successful in forcing payday lenders to adapt or exit the market altogether.

There are fears, of course, that by ensuring that loan sharks lend responsibly and by examining the financial situation of borrowers, desperate borrowers will be pushed back and forced to seek loans from even more nefarious sources like gangs.

To deal with such a risk, the government was invest significant resources in financial capacity services to form a kind of safety net – a place where people can always go to find a solution to their money problems. This includes financial mentoring services like Money talks – a free helpline where people can discuss their finances and make a plan to get out of debt or access responsible loans. There are also nonprofits funded by banks that offer responsible loans without interest or at low interest rates to those in financial difficulty, such as Kiwibank-championed. Ngā Tāngata and supported by BNZ Good shepherd.

Good Shepherd CEO Fleur Howard said she fully supports the move against loan sharks, who often lead people to find a quick fix in the world of long-term money problems.

“We strongly believe that the disadvantages of these high cost loans far outweigh the advantages,” she said.

“With these choices, people looking for these loans are now more likely to access a service like ours that has positive results in terms of a fair and short-term financial solution, while contributing to longer financial capacity. term and well-being, or decide to access a much longer-term solution such as financial mentoring.

While many lenders have obeyed the new laws, it remains to be seen whether or not there will be a lot of enforcement from operators who choose to flout them. The Trade Commission confirmed that it is still assessing lenders’ compliance with the legislation, but has not opened any investigation into alleged violations of the new rules on high-cost loans.

In the meantime, he has called for some scalps in recent successful court cases against payday lenders for breaking the old law on credit agreements in recent years.

In separate cases, lenders Ferratum and Pretty Penny were convicted of violating responsible lending requirements and failed to ensure their loan agreements were not oppressive. The two were ordered to repay the borrowers and Pretty Penny has said she will be pulling out of New Zealand in her settlement agreement.

High cost lenders have a habit of reincarnating like other businesses, and Pretty Penny could very well reappear in another form. Either way, a few valuable payday loan skins nailed to the wall send a very strong message to those looking to issue a 600% interest loan.

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