Time to get out of the water

Web stats highlight growing demand for payday loans

For a newly elected MP, Walthamstow MP Stella Creasy can take a bow. The campaign she has led against payday loans has been pretty effective.

The latest, in case you missed it, is that the Office of Fair Trading (OFT) is to investigate 50 UK payday lenders amid concerns that some firms are taking advantage of vulnerable consumers.

The scale and continuing growth of the payday loans sector – or as Creasy would call it, the legal loan shark industry – is a worrying sign of the times.

In February, the Coop Bank found that 5 per cent of the British population accumulated debt in 2011 due to payday loans.

That figure is already out of date.

A report recently released by Greenlight, the leading independent digital marketing agency, provides further evidence of the growing size of the payday loan industry.

In January, UK consumers made a total of 2.5m online searches for retail banking-related products.

Loans accounted for the majority (37 per cent) of searches (934,234) with the keywords ‘Loans’, ‘Payday loans’ and ‘Student loans’ being the top three terms consumers used to conduct their searches.

Specfically, the search term ‘payday loans’ accounted for 165,000 or 7 per cent of all retail banking searches in January.

By contrast, searches for the terms ‘credit cards’ and ‘mortgages’ each scored a mere 4 per cent of all searches.

So, just to labour the point, almost as many searches were conducted for payday loans as for searches for credit cards and mortgages, combined.

The Greenlight research also flags up conclusively just how aggressive and digital-savvy the payday loans sector has become.

MoneySupermarket.com is the most visible online retail banking-related online advertiser, achieving a 71 per cent share of voice through bidding on 25 keywords, at an average ad position of four. That finding comes as no surprise and is not exactly a cause for concern.

And the second most visible online banking advertiser? Step forward Wonga, with a 33 per cent share of visibility through bidding on four keywords.

Its payday rival QuickQuid displayed the most visible ad creatives of any advertiser (equal with Tesco Bank) while the top 10 also featured ww.minicredit.co.uk and www.paydayuk.co.uk.

If you think that it is bad in the UK, it is arguably worse in the US.

In the US, the numbers are staggering with an estimated 12m Americans annually caught in long-term debt from payday loans, according to non-profit research and policy organisation, the Centre for Responsible Lending. In contrast to the position in the UK, a number of leading US retail banks have jumped onto the bandwagon and are offering a range of payday loan products.

Wells Fargo, Regions Financial, US Bank and Fifth Third are just some of the largest US retail banks to offer payday loans.

It will be a brave –or rather foolish - UK retail bank which looks to follow their lead with such a product launch.

Meantime, pending the OFT investigation being concluded, one would hope that the payday loans sector might have the commercial and political savvy to clean up their act.

They could, for example, take steps to ensure that customers are not trapped into a cycle of debt by ending the rolling over of payday loans; they could consider the radical step of self-regulation by getting by on less than the APRs of, say the 4,214 per cent charged by www.wonga.com

Then again, pigs might fly.

The chances are that this is one area of retail banking where we might witness something approaching a consensus: that it is an area overdue for regulation.

That would be a right result for the new girl in the House from Walthamstow.

Douglas Blakey is the editor of Retail Banker International

Photograph: Getty Images

Douglas Blakey is the editor of Retail Banker International

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The Tinder dating app isn't just about sex – it's about friendship, too. And sex

The lines between sex, love and friendship are blurrier than ever, as I found out quickly while using the app.

The first time I met someone using Tinder, the free dating app that requires users to swipe left for “no” and right for “yes” before enabling new “matches” to chat, it was an unqualified success. I should probably qualify that. I was newly single after five years in a committed relationship and wasn’t looking for anything more than fun, friendship and, well, who knows. A few weeks earlier I had tried to give my number to a girl in a cinema café in Brixton. I wrote it on a postcard I’d been using as a bookmark. She said she had a boyfriend, but wanted to keep the postcard. I had no date and I lost my page.

My Tinder date was a master’s student from Valencia called Anna (her name wasn’t really Anna, of course, I’m not a sociopath). When I arrived at the appointed meeting place, she told me I was far more handsome IRL (“in real life”) than my pictures suggested. I was flattered and full of praise for the directness of continental Europeans but also thought sadly to myself: “If only the same could be said about you.”

Anna and I became friends, at least for a while. The date wasn’t a success in the traditional sense of leading us into a contract based on exclusivity, an accumulating cache of resentments and a mortgage, but it had put me back in the game (an appropriate metaphor – people speak regularly of “playing” with the app).

According to Sean Rad, the co-founder who launched Tinder in late 2012, the service was invented for people like me. “It was really a way to overcome my own problems,” he told the editor of Cosmopolitan at an event in London last month. “It was weird to me, to start a conversation [with a stranger]. Once I had an introduction I was fine, but it’s that first step. It’s difficult for a lot of people.” After just one outing, I’d learned two fundamental lessons about the world of online dating: pretty much everyone has at least one decent picture of themselves, and meeting women using a so-called hook-up app is seldom straightforwardly about sex.

Although sometimes it is. My second Tinder date took place in Vienna. I met Louisa (ditto, name) outside some notable church or other one evening while visiting on holiday (Tinder tourism being, in my view, a far more compelling way to get to know a place than a cumbersome Lonely Planet guide). We drank cocktails by the Danube and rambled across the city before making the romantic decision to stay awake all night, as she had to leave early the next day to go hiking with friends. It was just like the Richard Linklater movie Before Sunrise – something I said out loud more than a few times as the Aperol Spritzes took their toll.

When we met up in London a few months later, Louisa and I decided to skip the second part of Linklater’s beautiful triptych and fast-track our relationship straight to the third, Before Midnight, which takes place 18 years after the protagonists’ first meet in Vienna, and have begun to discover that they hate each others’ guts.

Which is one of the many hazards of the swiping life: unlike with older, web-based platforms such as Match.com or OkCupid, which require a substantial written profile, Tinder users know relatively little about their prospective mates. All that’s necessary is a Facebook account and a single photograph. University, occupation, a short bio and mutual Facebook “likes” are optional (my bio is made up entirely of emojis: the pizza slice, the dancing lady, the stack of books).

Worse still, you will see people you know on Tinder – that includes colleagues, neighbours and exes – and they will see you. Far more people swipe out of boredom or curiosity than are ever likely to want to meet up, in part because swiping is so brain-corrosively addictive.

While the company is cagey about its user data, we know that Tinder has been downloaded over 100 million times and has produced upwards of 11 billion matches – though the number of people who have made contact will be far lower. It may sound like a lot but the Tinder user-base remains stuck at around the 50 million mark: a self-selecting coterie of mainly urban, reasonably affluent, generally white men and women, mostly aged between 18 and 34.

A new generation of apps – such as Hey! Vina and Skout – is seeking to capitalise on Tinder’s reputation as a portal for sleaze, a charge Sean Rad was keen to deny at the London event. Tinder is working on a new iteration, Tinder Social, for groups of friends who want to hang out with other groups on a night out, rather than dating. This makes sense for a relatively fresh business determined to keep on growing: more people are in relationships than out of them, after all.

After two years of using Tinder, off and on, last weekend I deleted the app. I had been visiting a friend in Sweden, and took it pretty badly when a Tinder date invited me to a terrible nightclub, only to take a few looks at me and bolt without even bothering to fabricate an excuse. But on the plane back to London the next day, a strange thing happened. Before takeoff, the woman sitting beside me started crying. I assumed something bad had happened but she explained that she was terrified of flying. Almost as terrified, it turned out, as I am. We wound up holding hands through a horrific patch of mid-air turbulence, exchanged anecdotes to distract ourselves and even, when we were safely in sight of the ground, a kiss.

She’s in my phone, but as a contact on Facebook rather than an avatar on a dating app. I’ll probably never see her again but who knows. People connect in strange new ways all the time. The lines between sex, love and friendship are blurrier than ever, but you can be sure that if you look closely at the lines, you’ll almost certainly notice the pixels.

Philip Maughan is Assistant Editor at the New Statesman.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad