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.
 

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No, Jeremy Corbyn is not antisemitic – but the left should be wary of who he calls friends

The Labour MP's tendency to seek out unsavoury comrades is a symptom of an intellectual and political malady: the long-term ideological corruption of that part of the left in which he was formed.

“The scientist is not a person who gives the right answers,” said the French anthropologist Claude Levi-Strauss. “He’s one who asks the right questions.”

The British novelist Howard Jacobson is not a scientist, but he has asked the right question about the rise of Jeremy Corbyn, the improbable-but-likely next leader of the Labour party. Here it is:  “Why can’t we oppose the inequities of a society weighted in favour of wealth, and all the trash that wealth accumulates, without at the same time having to snuggle up to Putin, pal out with Hamas, and make apologies for extremists?”

One answer to the Jacobson Question has been offered by Yasmin Alibhai Brown, a defender of Corbyn. His “tendency for unchecked inclusiveness”, as she delicately puts it, is due to his “naivety”. But that explanation will not do. We won’t find the answer in one man’s naivety, especially not a 67-year-old with a lifetime of political experience behind him.

We must go deeper, reading Corbyn’s undoubted tendency to snuggle, to pal out and to apologise as a symptom of an intellectual and political malady: the long-term ideological corruption of that part of the left in which he was formed.

This corrupting ideology can be called “campism”. It has caused parts of the left to abandon  universal progressive values rooted in the Enlightenment and sign up instead as foot soldiers in what they see as the great contest between – these terms change over time, as we will see – “Progressive” versus “Reactionary” nations, “Imperialism” versus “Anti-Imperialism”,  “Oppressed” versus “Oppressor” peoples, “The Empire” versus “The Resistance”, or simply “Power” versus “The Other”.

Again and again, the curse of campism has dragged the political left down from the position of intellectual leader and agenda-setter to that of political irrelevance, or worse, an apologist for tyranny. 

Only when we register the grip of this ideology will we understand why some leftwingers march around London waving placards declaring “We are all Hezbollah now!”. Only the power of the ideology accounts for the YouGov poll that showed 51 per cent of Jeremy Corbyn’s supporters believe America is the “greatest single threat to world peace”, and one in four think a “secretive elite” controls the globe.

The intellectual history of campism has three chapters.  

In the short 20th century, it took the form of Stalinism, a social system that was at once anti-capitalist and totalitarian, and that spread a set of corrupting mental habits that utterly disorientated the left.

Clinging to the dogma that it must have been some kind of socialism that had replaced capitalism, many imagined themselves to be involved in a “great contest” between the capitalist camp and the (imperfect) socialist camp. And that ruined them. They became critical supporters of totalitarianism – notwithstanding their knowledge of the show trials, mass killings, gulags, political famines, and military aggressions; notwithstanding the fact that they themselves were not totalitarians.

The result was the slow erasure of those habits of mind, sensibilities and values of an older leftwing culture rooted in the Enlightenment. In its place the Stalinist-campist left posited lesser-evilism, political cynicism, power-worship, authoritarianism, and sophisticated apologias for tyranny.

In the Sixties and Seventies, the New Left created liberatory social movements that changed the face of the western world for the better. But the New Left was also a cheerleader or apologist for one third world authoritarian “progressive” regime after another, including Maoist China, a monstrous regime responsible for the deaths of tens of millions of “its own” people. Believing the world was divided into an imperialist “centre” exploiting a “periphery”, the New Left thought its duty was to support the latter against the former.

And when the baby boomers grew older and made their way into the universities and publishing houses, they formed the global creative class that has been reshaping every aspect of our intellectual culture ever since. Again, much of that reshaping has been a boon. Schooling us all in the anti-imperialism of idiots, and the romantic cult of the transformative power of revolutionary violence, has not.

After 1989, much of the left didn’t miss a beat. It quickly developed a theory that the world was now made up of a “Resistance” to “Empire”. Here was yet another reductive dualism. But this time there was barely any positive content at all, so campism took the shape of spectacularly inchoate and implacable negativism.

The result has been immense political disorientation, political cross-dressing, and moral debasement across swathes of the left. How else to explain the leftwing social theorist Judith Butler’s astonishing claim that, “understanding Hamas, Hezbollah as social movements that are progressive, that are on the left, that are part of a global left, is extremely important”?

When we understand how campism creates that kind of ideology-saturated and captive mind, we can better understand Corbyn’s choice of comrades and answer the Jacobson Question. 

The ideology demands two commitments. First, “Down With Us!” – the commitment to oppose the West as malign. Second, “Victory to the Resistance!” – the commitment to side with, or to apologise for, or to refuse to criticise, any “resistance” to the West.

The commitment to oppose every projection of force by the West as malign underpins Corbyn’s commitments to unilateral nuclear disarmament and withdrawal from Nato, his attitude to the IRA, and to Putin, and his false equating of the actions of Isis and the coalition in Iraq.

Corbyn will withdraw the UK from Nato because it is the military organisation of the West and therefore “imperialist”. He turns the world inside out and “blames the USA and Nato rather than Putin’s imperialistic Russia for the crisis in Ukraine,” notes Labour MP Mike Gapes.

I believe Corbyn would lead Britain into a warmer relationship with Putin’s Russia, and even thinks it was a bad thing that Poland was ever “allowed” to join Nato.

Astonishingly, given recent history, he also argues that Poland should have, “gone down the road Ukraine went down in 1990”. Corbyn opposes all military support to Ukraine and seems quite uninterested in the Ukrainian bid for freedom from Russian control. What matters much more to him is adherence to the campist ideology: “The self-satisfied pomposity of western leaders in lecturing the world about morality and international law has to be challenged,” he rails.

Campism also explains Corbyn’s comparison of the actions of Isis today and the actions of the coalition forces during the Iraq war. And those comments have a precedent of sorts. Corbyn was national chair of Stop the War during the Iraq war when the leadership circulated a statement that supported the “right” of the “resistance” to use “whatever means they find necessary”. At that point, the so-called resistance was targeting democrats, including the free trade union leader Hadi Saleh.

The second commitment of the campist left has been to side with, or apologise for, or refuse to sharply criticise, the so-called resistance camp. Without understanding this, Corbyn’s apologies for the Muslim cleric Raed Salah remain a mystery, his attitude to the IRA or the antisemitic Islamist terror groups Hamas and Hezbollah will seem harmless, even ahead-of-his-time diplomacy, and the idea that he indulges antisemitism will appear to be a “slur” by a “lobby”.

Corbyn has defended the antisemitic Raed Salah in these terms: “He represents his people extremely well and his is a voice that must be heard . . . I look forward to giving you tea on the terrace because you deserve it.”

In fact, Salah was found guilty of spreading the blood libel – the classic antisemitic slander that Jews use the blood of gentile children to make their bread – reportedly during a speech on February 2007 in the East Jerusalem neighbourhood of Wadi Joz.

Corbyn said he has no memory of meeting Dyab Abou Jahjah. Within minutes, Twitter was running photographs of Corbyn sitting next to Abou Jahjah – the Lebanese extremist who said, “I consider every death of an American, British or Dutch soldier as a victory” – at a public meeting.

Jahjah then boasted on Twitter of his “collaboration with Jeremy Corbyn” and insisted that Corbyn was “absolutely a political friend”. Again, it seems that Jahjah, being part of the “resistance camp”, according to the ideology, was simply beyond criticism.

It did not seem to matter that Jahjah reportedly referred to gay people as “Aids spreading fagots”, and was arrested in Antwerp for organising a riot. Or that he claimed to have published anti-Jewish cartoons showing Hitler and 15-year-old Anne Frank naked in bed with the caption: “Put that in your diary Anne”.

As the Community Security Trust commented: “I am sure that Corbyn would be the first to condemn Holocaust denial. The problem is not that Corbyn is an antisemite or a Holocaust denier – he is neither. The problem is that he seems to gravitate towards people who are, if they come with an anti-Israel sticker on them.”

Hezbollah comes with the mother of all anti-Israel stickers. That is why – although Corbyn knows that it is a radical Shia militant group that has subverted Lebanese democracy, actively supported Bashar al-Assad's brutality in Syria, and seeks the destruction of Israel – he nonetheless (and campism is a politics of “nonetheless”) tells the left that Hezbollah are our “friends”.

Hamas too. Corbyn also calls the Palestinian Islamist group his “friends” and argues that the organisation should not be called “terrorist”. Yet Corbyn knows that Amnesty International believes Hamas to be guilty of war crimes, torture, abductions, and summarily killing civilians. He knows that when five Jews praying in a synagogue were murdered, along with the heroic Druze policeman who came to their aid, in 2014, Hamas welcomed the attack, calling it a “quality development”. They even called it a “terror attack” – embracing the label Corbyn says they do not deserve.

The problem is not that Corbyn agrees with what all these people say. It is that he agrees with who they are: the Resistance to Empire. The apologies and the contortions and the evasions all begin there.

And then there are the Jews.

The concern here is not that Corbyn indulges in antisemitism. He does not. The concern is that he is has associated with others who have. The concern is that, when he is faced with what is called the “new antisemitism”, he is lost. At best, he is an innocent abroad who – oddly, in the age of “Google it!” – can’t seem to work out who is who, or what is what.

Writing for openDemocracy about Corbyn, Keith Kahn-Harris expresses scepticism about Corbyn’s explanation of his choice of comrades. “Although he has defended his contacts with Islamists, the IRA and others as a contribution to peace-making,” Kahn-Harris notes. “Corbyn does not have the deep relationships across the spectrum [or] the even-handedness that this would entail.”

What strikes Kahn-Harris most about Corbyn’s record is something else entirely: that he “is constantly predisposed to be at least convivial towards a broad swathe of those who see themselves as opposed to ‘the west’.”

He goes on: “Much of what appears to be [Corbyn’s] openness does indeed reflect engrained political pathologies.”

And that has been the claim of this essay, too: we have to look to those ingrained political pathologies – I have used the short-hand label “campism” to describe them – to answer the Jacobson Question.

Alan Johnson is the editor of Fathom: for a deeper understanding of Israel and the region and senior research fellow at the Britain Israel Communications and Research Centre (BICOM).