Over the years, logbook lenders and their own brand of quick and easy loans have been under considerable scrutiny. Coming under heavy fire from disgruntled former customers as well as the Financial Services Authority (FSA) in that time, logbook loans have had their fair share of bad press. So just what did logbook lenders do to get the country so riled up?
A global industry
The practice of money lending is nothing new and goes way back through the ages. From the pawnbrokers of ancient Greece and Rome, through to the founding of the Bank of England in the 1600s, right up to the multiple forms of lending and borrowing that we see today.
It's one of the few things in life that hasn't changed and the basic principle of money lending remains the same: someone borrows money from a person or a bank under an agreement to pay it back later, usually with a rate of interest on top. It was only in the 1930s with the introduction of the mortgage that money lending took on a life of its own.
Since then, there's always been one form or other of borrowing money. To begin with, it usually came in the form of a loan from a bank. But it wasn't until the 1950s that high street banks started to use widespread marketing for themselves in order to 'sell' money to the general public. First with their existing personal loan service and then credit cards.
Since those days, the world of finance and loans has grown into an international industry. Borrowing is available at every turn. Not only in high street banks and building societies, but adverts in print, on the radio and now even television. Lending is big business and over more recent years, there's been a steady increase in the so-called 'fast loans' offering easy money.
The storm before the calm
Being restricted to a bank and building society loans, many people were being turned down by the high street big guns for not fulfilling the right loan criteria. Whether that was down to their income or their credit history only the lender would know, but it was frustrating for anyone who needed to borrow money and felt blocked at every turn. These new fast loans gave people the chance to get a cash injection when they might not have been able to before.
Soon enough, companies offering payday loans, logbook loans and fast personal loans started to become a common fixture. Offering fast money at the drop of a hat, it was all too easy to get what you needed. With their services being offered to everyone from almost any walk of life or financial background, the public was lapping it up.
However, the honeymoon period wasn't to last. Amid complaints and bad press, it was deemed that many of these loan companies were playing fast and loose with their customers and their money. Accusations of hidden charges, high fees and even higher interest rates as well as underhand tactics, were all thrown into the hat, with many loan companies taking the blame for pushing people into spiralling debt.
Eventually, the fast loan industry came under the investigation of the Financial Conduct Authority (FCA) and the results weren't good.
Continue reading "Are Logbook Lenders Any Good? 5 Ways You Can Be Certain"