Loans and interest payable to large electrical store

[ClubMan]

Re: Loans and intrest payable to large electrical store

Its a base business which relies on parting people of low IQ from their money.

I don't think that you have to be of low IQ to be gullible.

How I feel is it depends how the product is presented. If the consumer can demonstrate they understand the deal they are accepting for themselves then I have no problem with it as its their choice.

So there should be some sort of mandatory test to check if somebody is too gullible for their own good? "Sorry sir - you failed the idiocy test so I am unable to sell you this TV on these credit terms..."?

 

[hjrdee]

Re: Loans and intrest payable to large electrical store

Hjrdee, your phrasing/tone implies that 'agreeing with Clubman' might be a rarity!

Not quite! Its just most people are blaming the stores for offering these interest rates and not blaming the people for taking them up. If you have people prepared to €6,000 for a tv on credit at 29% you can hardly blame the shop for offering it.

Talk about being seem coming!!

 

[z108]

Re: Loans and intrest payable to large electrical store

I don't think that you have to be of low IQ to be gullible.

I dont think it helps. People can have high IQs/talents for some things which amaze others yet have low IQs for other things such as numbers and interest rates.
The most I would hope for is for the person entering a contract to not enter it in ignorance, for the whole deal to be explained in plain english and to have a cooling off period.

So there should be some sort of mandatory test to check if somebody is too gullible for their own good? "Sorry sir - you failed the idiocy test so I am unable to sell you this TV on these credit terms..."?

You make it sound like a Monty Python sketch
I only wish like the majority of those posting for the least harm to be done.
Whats to stop these companies making the interest rate 1 million percent and sending the bailiffs around the next week ? At what point in your view does an interest rate become immoral if at all ?
Something can be legal yet immoral or immoral yet legal. They are not mutually exclusive terms.

 

[ClubMan]

Re: Loans and intrest payable to large electrical store

Whats to stop these companies making the interest rate 1 million percent and sending the bailiffs around the next week ?

IFSRA and/or the Consumer Credit Act I would presume. Don't credit rates need to be cleared with IFSRA? When the rate charged is greater than 23% APR then the lender must register with IFSRA as a [broken link removed].

At what point in your view does an interest rate become immoral if at all ?
Something can be legal yet immoral or immoral yet legal. They are not mutually exclusive terms.

In my opinion morals have nothing to do with this (i.e. are off topic) as they are a subjective and personal matter.

 

[z108]

Re: Loans and intrest payable to large electrical store

In my opinion morals have nothing to do with this (i.e. are off topic) as they are a subjective and personal matter.

I have to completely disagree with morals being off topic as the original poster Pinkybear who began the topic immediately in post 1 raised this compassionate yet subjective and personal viewpoint below.

But i couldn't help but feeling for this person,

A subjective and personal matter is an individuals interpretation of the definition of whats moral but the type of morality which seeks to nanny us is not what I am talking about.
My definition is the difference between whats right and whats wrong and I think whenever any decisions are made especially by a large public corporation which concern others that the decision makers should definitely consider whether those decisons are right or wrong .

 

[CCOVICH]

Hey, if Gary Coleman doesn't have a problem with 99.25% APRs, then I don't see what everyone here is worked up about.

 

[sinbadsailor]

Re: Loans and intrest payable to large electrical store

If your told about it and still avail of it, you have little grounds to complain!

I think I might have gone about this one a bit wrong. Yes I agree it is up to the consumer to read and agree to terms of any credit agreement. The consumer must make the call....the main point I guess is the fact that I think 20+% interest cannot be justified as 'reasonable' for any line of credit, thats all.

 

[sinbadsailor]

Re: Loans and intrest payable to large electrical store

IFSRA and/or the Consumer Credit Act I would presume. Don't credit rates need to be cleared with IFSRA? When the rate charged is greater than 23% APR then the lender must register with IFSRA as a [broken link removed].
In my opinion morals have nothing to do with this (i.e. are off topic) as they are a subjective and personal matter.

I was wondering why they all seem to stop at 22.5% then! It's about fair play and respecting the customer as your source of income. Not taking things to he absolute limit to wring every last cent out of some unsuspecting punter who only wants a new sofa or TV.

 

[pinkyBear]

Not quite! Its just most people are blaming the stores for offering these interest rates and not blaming the people for taking them up. If you have people prepared to €6,000 for a tv on credit at 29% you can hardly blame the shop for offering it.

I actually disagree with this, not so long ago the banks were repremanded for offering clients pre approved loans and sending letters out to their customers. Banks have also stopped increasing your credit every year without your consent - why? there were concerns that it was too easy to get into debt as "money" was been thrown at consumers.

We have seen where concern has been raised at the 100% mortgages as those that get these mortgages are those who may not be able to save for a full deposit.. And find themselves dealing with negative equity..

But not much has been made of easy store credit - I include store loyalty cards in this as well... Ulitmatly the consumer is responsible to manage their own budget, and banks and shops are entitled to make a profit for providing a service, but 29.9% (even with a year off) is still very steep....

 

[MrMan]

How aggressive in practice? I can't imagine many situations in which a "no" or "please go away" would not deal with such a problem.

Exactly, I can say no and you can say no, but its a bit idealistic to presume that everyone that walks through the door has the same 'strength'. There are those who are not in a good financial position and maybe never will be and the carrot dangled for them is that its only €10 a week for 5 years, even they can afford it, they don't look at the fact that over the 5 years they will have paid for it twice. Yes they have been gullible to an extent, but do you not think that some people are easier to pull into this net than others. You will also have people not knowing what APR is, how to read etc and they are just told its gonna cost you €x a week which will seem reasonable. I'm not saying that these high rates should be abolished, even though they are ridiculously high, I just like the OP feel synpathy for some (not all) of those that go in for the longer more expensive 'deals'

 

[Sunny]

Re: Loans and intrest payable to large electrical store

How aggressive in practice? I can't imagine many situations in which a "no" or "please go away" would not deal with such a problem.

I would consider myself to be quiet financially aware and strongwilled. I bought went to buy a tv recently from one of the big retailers. They asked me if I needed financing and said no which was fine. They then moved on to the issue of "insurance" which as we all know is overly expensive in these stores and in alot of cases unnecessary. I again said no, at which point one of the salesman colleagues joined him so to tell me about the benefits and I still said no. They kept on and on and on until I asked to speak to the manager about the selling technique. He came over, apologised and then went into the spiel about how silly I was for not taking on their overpriced insurance. I walked out of the store.

My problem is that if the banks used the same selling methods for their financial products, the financial regulator would be all over them like a rash.

 

[Guest127]

as CM correctly states it's not a rip off if the person who applies for such a loan has the terms and conditions explained to them. However most people in the position of applying for such a loan are probably not in a position to apply for either a bank loan/Cu loan etc. or have already such a loan and these financial institutions won't loan them any more at this time. It's these very people who are exposed to this kind of excessive interest rates. Perhaps they need something urgently or are just vunerable to good sales talk. Either way they are being taken advantage of. Not rip off. just exploitation.

 

[ClubMan]

A subjective and personal matter is an individuals interpretation of the definition of whats moral but the type of morality which seeks to nanny us is not what I am talking about.
My definition is the difference between whats right and whats wrong

Which is surely a personal and subjective issue?

as CM correctly states it's not a rip off if the person who applies for such a loan has the terms and conditions explained to them.

Not quite. The terms & conditions should be written down clearly and made available to the consumer in advance of them signing some sort of credit agreement. I don't believe that somebody (e.g. a sales assistant) should necessarily be tasked with explaining these to them. It is up to the consumer to read them and seek clarification if necessary.

the main point I guess is the fact that I think 20+% interest cannot be justified as 'reasonable' for any line of credit, thats all.

Why are you unsure about your point and why do you think that 20%+ is unreasonable? Why not 19.5% or 10%? Surely once a credit provider and their agents operate within the relevant laws/regulatory framework (e.g. providing suitable terms & conditions/explanatory material) then they should be allowed to charge whatever price the market will bear?

 

[Dreamerb]

Re: Loans and intrest payable to large electrical store

"Sorry sir - you failed the idiocy test so I am unable to sell you this TV on these credit terms..."?

I think there is a genuine point made in the thread about the kinds of terms available, which are generally poor value for borrowings, and I have a certain discomfort with the hard sell being applied to people who may be more vulnerable, including financially. But there are very many people who will stage their payments so as to avail of an interest-free period only, and either pay off in full over that period, or replace any remaining outstanding borrowings with cheaper ones.

As regards those who do sign up because they can "afford the payments" - well, that's a consumer education issue more than anything else. It's one that organisations like the Independent Financial Services Regulatory Authority [IFSRA], the Consumers' Association, and, oh yeah, AAM among others, all do their bit to deliver. Caveat emptor is harsh when the buyer is ill informed and / or deceived and doesn't have the means to know what they're getting in to, but it's fair in a marketplace where quality standards apply and the buyer is educated.

 

[z108]

"Sorry sir - you failed the idiocy test so I am unable to sell you this TV on these credit terms..."?

Like a Monty Python sketch

Which is surely a personal and subjective issue?

Well some concepts like stealing may not appear wrong to a tiny minority of people but I was conservatively referring to a dictionary definition of right and wrong

 

[ClubMan]

Well some concepts like stealing may not appear wrong to a tiny minority of people but I was conservatively referring to a dictionary definition of right and wrong

We could get into an existentialist discussion here but life is too absurd for that sort of carry on.

 

[shanegl]

Is the risk of default higher with store credit, which may go some way towards explaining the high rate?