|Paying for a payday loan|
It cannot be right for those in debt to be sold more debt. That is what the payday loan arrangers are doing. Thankfully their schemes have been put up to the light showing horrible images of high interest rates and punitive repayments. And no doubt if their clients fail to pay they will "sell the debt" to another business, operating as a debt collector. These debt collectors buy on the cheap (about 10% of the face value) and try to get the maximum possible back. The original lender may have cashed in on a policy for bad claims. Debt is big business so long as there's a merry-go-round for those involved to be on.
Those collecting debts have scant regard for contract law or agreements. Hassle and harass comes before detail and fact. One of the biggest scams was payment protection insurance, still a factor in the finance business. Most were not worth the paper they were not written on. The computer saw to that. Yet most thought they were prudently buying a policy that would safeguard them. Or sold a policy they did not need or suit them. The industry buys and sells debt to make a profit. The higher the interest rate, the better the expected return.
People should keep well away from payday loan sharks. And whilst a lot may be thinking so what, this affects us all. In the end it is the taxpayer that pays. Not the loan arrangers or debt purchasers who cream off their bit. They will be around well after the mess is being cleared up.