Loan Companies: 56% interest? Is this Legal?

**Buddha** · 25-09-2011, 05:22 PM

Talking to a group of neighbours after a Residents Association Meeting, the chat turned to loans and the trouble so many are in and cannot find a way out of. MABS will no longer deal with customers of a certain loan company who only lend no more than 500 euro at a go, but charge 56% interest, but do "top-up" loans in order to ensure payment of current outstanding payments, thus creating a never ending poverty trap for so many.

Having looked at the site in question, and having a bad dose of bronchitis it seem Provident that I came across the company in question at first attempt. An agent calls, and calls, and meets people at the Post Office on Pensions/ Loan Parents day and the money is taken there and then, if not, well, as the rest is heresay, best not to say it.

I have no idea about loans or lending (only of being broke) but 56% seems a huge interest rate to charge. As this is obviously legal, how is it permitted? Thank you.

**~~sinsin~~** · 25-09-2011, 05:26 PM

Originally Posted by Buddha

Talking to a group of neighbours after a Residents Association Meeting, the chat turned to loans and the trouble so many are in and cannot find a way out of. MABS will no longer deal with customers of a certain loan company who only lend no more than 500 euro at a go, but charge 56% interest, but do "top-up" loans in order to ensure payment of current outstanding payments, thus creating a never ending poverty trap for so many.

Having looked at the site in question, and having a bad dose of bronchitis it seem Provident that I came across the company in question at first attempt. An agent calls, and calls, and meets people at the Post Office on Pensions/ Loan Parents day and the money is taken there and then, if not, well, as the rest is heresay, best not to say it.

I have no idea about loans or lending (only of being broke) but 56% seems a huge interest rate to charge. As this is obviously legal, how is it permitted? Thank you.

It is widespread in my town along with heroin dealing.
Why is it permitted?

Check with one of your local overworked Garda or FG/Labour supporters.

**concernedparent** · 25-09-2011, 05:30 PM

I assume this is regulated by either the financial regulator or the Central Bank.

They will probably tell us that they are doing nothing illegal and that if people dont like the interest rates, they should shop around.

But people borrowing from these establishments are generally not in a position to shop around.

**TotalMayhem** · 25-09-2011, 05:39 PM

Originally Posted by Buddha

a certain loan company

Without knowing the facts (and no, hearsay is not factual evidence) and the name of the company, how do you expect anyone to answer questions regarding the legality of such loans?

If that "certain loan company" is not regulated by the Financial Regulator, then it's hardly legal. If the company is regulated, such practices should be brought to the attention of the Regulator.

**Buddha** · 25-09-2011, 05:42 PM

Originally Posted by concernedparent

I assume this is regulated by either the financial regulator or the Central Bank.

They will probably tell us that they are doing nothing illegal and that if people dont like the interest rates, they should shop around.

But people borrowing from these establishments are generally not in a position to shop around.

Exactly! Who else would lend to a Lone Parent for example, with no job. What concerns me is that MABS which was set up by Proinsias De Rossa for dealing with exactly this type of loan-sharking have apparently given the go ahead to this company by not helping people who owe money to this particular company.

If I applied for a loan of 500 Euro. got it, then refused payback, does anyone know what would occur. Do "heavies" come knocking? Do courts beckon? 56% interest rate. I cannot bloody well believe that that can be legal. I think I will do it and fight it tooth and nail.

**C. Flower** · 25-09-2011, 07:10 PM

There are loans advertised on television with higher interest rates.

I had a feeling of disbelief when I heard them.

The interest rates of sub prime mortgage companies are "unbelievable" but apparently legal.

And the markets wanted 20% not long ago to lend to the Irish Government.

Of course there should be laws against it. But I don't think there are.

And now the Credit Unions are in trouble, and don't have money to lend, and can't afford to take risks, people are far more likely to turn to these loan sharks.