Payday loan lender supports MP’s push to cap the cost of borrowing
In a statement issued today, Gary Miller-Cheevers, CEO of payday loan company www.speedeloans.com, has pledged his support for various calls from the government to put a cap on the cost of payday loans borrowing.
MP Stella Creasy has been leading a high profile campaign to stop the “legal loan sharks” by pushing for a cap on interest rates charged on products such as payday loans. MEP Alyn Smith from the Scottish National Party (SNP) was reported last week* as saying: "Cameron and his cronies must get their act together and regulate these companies out of existence before more people face financial ruin as a result”.
Mr. Miller-Cheevers comments: “Speedeloans supports the continuing need for a well run and tightly regulated short term finance market and applauds those members of the government looking to protect the public from unscrupulous lenders.”
He suggests that one solution for all short term lending would be the introduction of expressing the cost of loans in £’s terms, rather than APR (or EAR often quoted for bank account overdrafts), so customers can easily compare the actual cost, and quickly work out if it is something they can afford. He also has concerns over the use of the term EAR.
“APR’s and EAR’s can be confusing for many customers – and also misleading. For example, speedeloans has to quote an APR of 2243% for a payday loan and yet HBoS are able to quote 0% EAR as an overdraft amount.
“The EAR is the actual annual interest rate for an overdraft and doesn’t take into account fees and charges, while an APR does. How can customers compare borrowing money on a like-for-like basis when the APR means something different to an EAR? Maybe this is also something that should be investigated – transparency for all types of borrowing.
“Speedeloans is already committed to offering a fair and transparent service and welcomes changes that would put a stop to disreputable lenders and their profiteering. We ensure that each potential customer knows what the cost of a payday loan will be before they proceed and have recently strengthened our systems to reject applicants who already have high levels of debt or who have taken on multiple payday loans through less scrupulous operators”.
Mr. Miller-Cheevers added: “Used responsibly, payday loans can offer a cost-effective way to satisfy emergency short-term loan needs. With an average loan application at £250 for a term of 19 days until next payday, the cost for this would be just over £50 including all costs. Compare this to an unauthorised overdraft at Bank of Scotland’s Halifax of £5 per day, which comes to £95 plus the £10 per bounced item they charge, means that their charges are over double that of speedeloans”.
Speedeloans was named the second cheapest payday loan provider out of ten UK companies in recent research**.
Ends
CONTACT:
Gary Miller-Cheevers, speedeloans.com, CEO, telephone: 0844 879 3199 or 07545 148121, email: gmc@speedeloans.com
ABOUT US:
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.
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