Comments on: Stop Loan Sharks – the campaign commences

By: Tony Milne

Tony Milne — Thu, 22 Apr 2010 02:04:36 +0000

Website link doesnt seem to be working…the text of the link is write, but it’s linked wrong.

By: tupouto'a

tupouto'a — Mon, 19 Apr 2010 01:53:15 +0000

over the years, i have seen many of my people go to loan sharks and ask for a loan, and get ripped off. my opinion is, the loan sharks should be at fault. Why? most elderly people who brought up in the islands come to NZ in search of a better future for thier families. unfortunaley, when they need help, they go to the loan sharks. but they cant understand the law nor speak the language. the repayments are either too high, and/or the interest rat charges puts the loan through the roof! so, the loan sharks are at fault simple as that

By: Sam

Sam — Tue, 16 Mar 2010 04:48:27 +0000

@Richard McGrath – perhaps because access to contraception is not equal across across income? Poorer people tend to be more often religiously affiliated which again often restricts access and use of contraception. Poorer families are more likely to be larger, more fragmented, and started earlier (teen pregnancies), perhaps this is an indicator of poverty rather than a rational choice as your are trying to make it out to be?

I see a lot of advocating for the market to incentivise but not a lot of using one’s brain to see that the market is producing unwanted social results. Irresponsible is the word that comes to mind.

By: Falafulu Fisi

Falafulu Fisi — Mon, 15 Mar 2010 19:05:04 +0000

Richard McGrath said…
Why don’t the Tongan churches help set up a credit union for their parishioners?

Nope! Tongan churches view running a business (even if it is to help their own members) as something heathen or as a sort of contradiction of their biblical beliefs, so they won’t do it.

By: Tracey

Tracey — Mon, 15 Mar 2010 18:04:33 +0000

Bea

“Education is needed, starting with better financial education in schools.” It’s already in the curriculum so this is underway…

By: SPC

SPC — Mon, 15 Mar 2010 10:31:57 +0000

One problem appears to be the ability to continue to charge interest/claim a continuing debt even after possessing the goods that the loan was borrowed against.

One option is a law change to allow any borrower in this position to declare bankruptcy and so not have to pay the debt back or otherwise. Simpler would be to define where the lender takes possession of the good, or is offered the good in settlement of the debt, this renders that debt null and void.

That and setting a maximum level of interest – why not set a rate at the credit card rate – would soleve most of the problem. Establishing credit unions in and for the community would assist this.

As for illegal loan sharking – simply bring such activity into the proceeds of crimes act and loan shark the loan sharks (confiscate their assets).

By: Bea

Bea — Mon, 15 Mar 2010 09:43:24 +0000

I don’t agree with “The Bill allows for maximum interest rates to be set”. Government interference in interest rates is unwarranted.

But I do agree with a consumer campaign against loansharks. Their behaviour around poorer areas is plain unethical. Naive and desperate people do get locked into a vicious cycle that they can’t get out of.

Education is needed, starting with better financial education in schools. And better disclosure laws are warranted, along with improved advertising standards.

By: Richard McGrath

Richard McGrath — Mon, 15 Mar 2010 09:29:05 +0000

A few random thoughts:

No-one made that family have 5 children. They could have sold the car instead of spending $3,200 to get it repaired.

Suggestion to Tongan family: sell the car and buy two or three bikes that are much cheaper to maintain. That’s much “greener” than running a gas-guzzling, Gaia-killing CO2-spewing automobile.

Loan sharks play an important function. They encourage people to save rather than borrowing and racking up huge debt.

I agree with the suggestion that credit unions would help to reduce the interest rates for high-default-risk people wanting loans.

Why don’t the Tongan churches help set up a credit union for their parishioners? They could undercut the loan sharks by charging, say, 20% interest.

Just remember, you heard it here first ~:)

By: Tracey

Tracey — Mon, 15 Mar 2010 04:06:45 +0000

I agree with George these people dont care about credit checks they are charging high rates because they know the person is desparate, they will do what they must to get their money back.

By: George

George — Mon, 15 Mar 2010 03:50:57 +0000

Gary – I understand the first assumption (i.e. that people who aren’t creditworthy wouldn’t pass the test and therefore wouldn’t get a loan). But it’s what happens next that’s the problem.

I presume that in order to go to a loan shark in the first place, as they do at present, these people are desperate. Failing a credit check doesn’t take away that desperation, so instead of going to the High Street loan shark (if such a thing exists – I’m not really up to speed on how these things work) would they not go to an under-the-counter back-street one. With either the same or even worse results?

I’ve got not problem with calling for credit checks. I just don’t see how they’ll have much effect.