OFT writes to 240 payday lenders to warn them over poor practices

The legal loan sharks have been cautioned.

After publishing further guidance on debt collection, the Office for Fair Trading (OFT) has now written to all 240 payday lenders operating in the UK after starting an investigation in February 2012 to investigate how lenders carry out debt repayments after it was revealed there were "emerging concerns" over poor practice. 

The guidance by the OFT clarifies what is expected when using continuous payment authority (a method of payment via debit or credit card to a company one wishes to make regular payments to) to recover debts, and it is high time guidance was clear on this issue.

Many companies have been found to use tactics that could very well be described as bullying and intimidation. Even well-known lenders like Wonga were warned by the OFT to stop sending letters to its customers accusing them of committing fraud

The worst example of debt recovery from a payday lender I have heard of is from the company CIM Technologies Ltd, also known as Tooth Fairy Finance. Action was taken on them by the OFT in 2010 to stop them from taking advantage of continuous payment authority but varying the repayment dates for loans taken out and the amount payable on each installment.

On a post written up on the Credit Action Group forum, one member writes what it was like being a customer of Tooth Fairy. After taking out a loan of £100, failing to meet a payment and having requests of an extended payback period fall on deaf ears, the person alleges that Tooth Fairy then decided to:

  • [Call] my home number on a daily basis leaving information regarding who they are and my private account with them, that is that I have an outstanding loan and how much it was for, leaving the information open to third parties.
  • [Send] me various emails each day telling me that they are adding fines to my loan.
  • [Threaten] me with bailiffs and bankruptcy – for a £100 loan? I don’t think so. They also said they would send bailiffs to all known addresses to collect goods up to nine times the value of the debt.
  • [Tell] me they have passed my file to a solicitor and they are charging me £150 for this to be done. I have not heard from any solicitor or any debt collection agency (West Yorkshire Security Debt Collections) whom they say they have also consulted with.

Another post on the group claims that the borrower would hear nothing from the company for weeks, even while charges were still clocking up, and that Tooth Fairy avoided going through normal procedures of lateness charges or debt plans.

But better debt collection methods is just one element of the wider concern about how the payday lending industry is regulated.

David Fisher, director of consumer credit at the OFT, said earlier this year that he hoped the Financial Conduct Authority (or FCA – which will eventually replace the OFT in responsibility of consumer credit regulation) would bring the prospect of greater regulation, as at present there is “a very light-touch regime”. 

Though even getting close to this is proving problematic as efforts are still being made to add an amendment on the Financial Services Bill to give the FCA power to cap the total cost of credit. Until such regulatory common sense is considered then lenders will still have free terrain over vulnerable consumers. 

Update

A representative of Web Loans Processing, the parent company of Toothfairy Finance, has asked us to clarify a couple of points in the article. We are happy to do so, and to note that the Financial Ombudsman has not ruled against Toothfairy with regards to any non-paying clients:

The Article makes comments regarding bailiffs, solicitors, added fees and regular contact with customers via email and phone; a little research would have quickly identified all this as standard practice when bailiffs are recovering debt, even for high street banks.

Further, maintaining regular and consistent contact with clients is a requirement of any credit licence. Toothfairy Finance works with its customers and we are happy to discuss any questions or issues they may have. For direct help, please email us.

 
A shark. Not a loan shark. Photograph: Getty Images

Carl Packman is a writer, researcher and blogger. He is the author of the forthcoming book Loan Sharks to be released by Searching Finance. He has previously published in the Guardian, Tribune Magazine, The Philosopher's Magazine and the International Journal for Žižek Studies.
 

Photo: Wikimedia Commons and Getty
Show Hide image

“Rise like lions after slumber”: why do Jeremy Corbyn and co keep reciting a 19th century poem?

How a passage from Percy Shelley’s The Masque of Anarchy became Labour’s battle cry.

“If I may, I’d like to quote one of my favourite poets, Percy Bysshe Shelley,” Jeremy Corbyn politely suggested to a huge Glastonbury audience. The crowd of nearly 120,000 – more accustomed to the boom of headline acts than elderly men reading out romantic poetry – roared its approval.

“Rise like lions after slumber, in unvanquishable number!” he rumbled. “Shake your chains to earth like dew, which in sleep had fallen on you: ye are many – they are few!”

The Labour leader told the crowd that this was his favourite line. It’s the final stanza of Shelley’s 1819 poem, The Masque of Anarchy, written in response to the Peterloo Massacre earlier that year, when a cavalry charged into a non-violent protest for the vote.

Though it was not published in Shelley’s lifetime – it was first released in 1832 – the poem has become a rallying cry for peaceful resistance. It has been recited at uprisings throughout history, from Tiananmen Square to Tahrir Square.

Corbyn’s turn on the Pyramid Stage was not the first time he’s used it. He recited the stanza during his closing speech on election night in Islington, and the audience began quoting along with him:


It was also used by comedian and celebrity Labour supporter Steve Coogan at a rally in Birmingham:


During Corbyn’s second leadership campaign, his ally Chris Williamson MP told a public meeting that this part of the poem should be “our battle cry” . He delivered on this the following year by reciting the poem to me in his Renault Clio while out on the campaign trail in England’s most marginal constituency (which he ended up winning).

You can hear it echoed in Labour’s campaign slogan: “For the many, not the few”.

Corbyn’s election guru, James Schneider, told the Standard at the time that “it would be a stretch” to say the slogan was taken directly from the poem, but that “Jeremy does know Shelley”. Yet even he took the time to recite the whole stanza down the phone to the journalist who was asking.

Corbyn is famously a fan of the novelist and author Ben Okri. The pair did a literary night at the Royal Festival Hall in London’s Southbank in July last year, in which the Shelley lines came up at the end of the event, as reported by Katy Balls over at the Spectator. Okri announced that he wanted to recite them, telling Corbyn and the audience:

“I want to read five lines of Shelley . . . I think there are some poems that ought to be, like you know those rock concerts, and the musician starts to sing and the whole audience knows the lines? And sings along with them? Well this ought to be one of those, and I’d like to propose that we somehow make it so that anytime someone starts with the word ‘Rise’, you know exactly what the lines are going to be.”

Which, of course, is exactly what Corbyn did at Glastonbury.

“We have this huge, abundant literature on the left and it’s hardly known”

The former left-wing Labour leader Michael Foot loved the poem and recited the lines at demos, and Stop the War – the campaign group Corbyn supports and chaired – took a line from it as the title of its 2014 film about anti-Iraq War action, We Are Many.

So why does the Labour left rally around some lines of poetry written nearly 200 years ago?

“It’s a really appropriate poem,” says Jacqueline Mulhallen, author of Percy Bysshe Shelley: Poet and Revolutionary (Pluto, 2015). “Shelley wrote a poem about the fact that these people were protesting about a minority taking the wealth from the majority, and the majority shouldn’t allow it to happen.

“He was writing at the beginning of industrial capitalism, and protested then, and 200 years later, we’ve still got the same situation: food banks, homeless people, Grenfell Tower, more debts – that’s why it has great resonance when Corbyn quotes it.”

“Shelley said there’s loads of us, it’s just a little corrupt crew – well, of course that applies now”

Michael Rosen, the poet and former Children’s Laureate, also describes the poignancy of Shelley’s words in Corbyn’s campaign. “You’ve got a sense of continuity,” he tells me. “Shelley was campaigning for freedom, for free thought, for free love. He was campaigning for a fairer society; it was a time of incredible oppression. He said there’s loads of us, it’s just a little corrupt crew – well, of course that applies now.”

Rosen celebrates the poem’s place in the Labour movement. “When any of us from the left quote people from the past, we’re saying that we have traditions... We’re making a claim on our authenticity,” he says. “Just in the same way as the right and the establishment draw on the pageantry of the Queen, or talk about Parliament or quote Winston Churchill. These are our traditions, which are different. You hardly ever come across it, either in newspapers or history lessons or anything.”

Rosen, a friend of Corbyn’s, believes his speech brings a left-wing tradition alive that is often forgotten. “We have this huge, abundant literature on the left and it’s hardly known. What’s great about Jeremy calling on it is to remind us . . . This stuff sits in old museums and libraries, gathering dust until it’s made active and live again. It’s made active and live particularly when being used in an environment like that [Glastonbury]. He was making the words come alive.”

Read more: 7 things we learned from Jeremy Corbyn on The One Show

The Masque of Anarchy’s final stanza has been recited at high-profile protests throughout history – including at the 20,000 garment workers’ strike in 1909 in New York, the student-led demo in China’s Tiananmen Square in 1989, anti-Poll Tax protests, and at Tahrir Square in Egypt during the Arab Spring, according to Mulhallen. The way civilians were treated by the authorities in many of these protests echoes what happened at Peterloo.

So does Corbyn’s penchant for the verse mark a similar radical turning-point in our history? “It’s indicating a change in attitude that people should start thinking about redistributing the wealth again,” says Mulhallen. “People are becoming much more aware.”

Anoosh Chakelian is senior writer at the New Statesman.

0800 7318496