Speedeloans says misconceptions over payday lenders are “lies, damn lies, and statistics”
Headlines trumpeting astronomical interest rates and stories of payday lenders preying on vulnerable borrowers are “lies, damn lies, and statistics”, says Gary Miller-Cheevers, CEO from speedeloans.
In a statement issued today, Mr. Miller-Cheevers explains: “There are a lot of misconceptions about payday lenders and a lot of strange statistics that are interpreted negatively to portray all payday lenders as the bad guys. While I accept that sadly there are some unscrupulous lenders out there, used responsibly, this form of borrowing can be a cost-effective way of accessing a short term loan.
“The press love to bandy around the APR’s that the OFT make us quote, and call them interest rates of 3,000% to 4,000%. This is ridiculous. It means that if a person borrowed £250, they would owe £7,500 to £10,000!
“Clearly no responsible lender would charge this and no borrower would pay this ... but it just shows how figures can be manipulated in order to make shocking headlines!
Mr. Miller-Cheevers continues: “Certainly, our customers in general are very happy with payday loans as a product. Recent research* highlighted how 86% of our customers say we are good / excellent. The study also showed that nearly twice as many of our existing customers would apply for a payday loan rather than go to their bank if they needed a cash advance in future.”
Mr. Miller-Cheevers also responded to an article in The Telegraph newspaper (14.03.12)** which says that last year, out of 370,000 enquiries, there were 17,414 complaints to the Consumer Credit Counselling Service (CCCS) about payday lending.
He explains: “The Telegraph cites the number of complaints about payday loans as 13% – yet, using the same figures, our calculations show the number of complaints to be just under 5% - less than 1-in-20 complaining about payday loans.
“This certainly tallies with our experience – with 75% of speedeloans customers paying their loan back on time, and 20% we have to help, this leaves just 5% who completely fail to repay their loans.
“As a responsible lender, speedeloans has a policy of capping interest after 6 months and positively encourages borrowers who find themselves in difficulty to make fast contact with the CCCS. Failing that, we will look to give a customer an affordable, interest free, payment plan.
“Often in the press it appears to be a case of lies, damn lies, and statistics, which we find unfair and misleading. For example, the same article says that the average debt on a payday loan was £1,267 in 2010. Our figures show average debt at nowhere near this figure, maybe because as a responsible lender, when our customers do find themselves in financial difficulty, we cap interest and work with them.
“With the Select Committee’s recommendation that annual interest rates – or APR’s - are dropped from marketing material in favour of a more realistic ‘total cost of credit’ figure, we are hoping that this sort of inflammatory journalism will stop.”
*Independent research carried out on behalf of speedeloans during February 2012
Gary Miller-Cheevers, speedeloans.com, CEO, telephone: 0844 879 3199 or 07545 148121, email: email@example.com
Stella Hulott, Speedie PR, telephone: 01843 831088 or 07932 750271, email: firstname.lastname@example.org
speedeloans.com is a practical alternative to banks that can no longer help their customers with their short term financial needs. Privately backed by people who understand our customers, our mission is to provide instant decisions and two hour money whenever they need it.
We are at the cutting edge of modern consumer finance by offering small, short term loans online with real speed and ease. We are flexible and paper free which means you can apply using our easy-to-use website whenever you need cash in a hurry. We have a consumer credit licence from the Office of Fair Trading.
In August 2011 we won an award for “Most Responsible Lender” which we welcome as proof that we are doing the right thing both for our own business, but also more importantly, our customers.