The 2015 Payday Loan Rules Made Simple

Great news for customers of Payday Loans! In November 2014 the Financial Conduct Authority confirmed the following change to the rules governing payday loans:

From 2 January 2015, no borrower will ever pay back more than twice what they borrowed, and someone taking out a loan for 30 days and repaying on time will not pay more than £24 in fees and charges per £100 borrowed.

In line with this, all the lenders on our panel have lowered their interest rates and have confirmed they operate within these new rules.

How will the FCA affect You?

From the 1st April the FCA (Financial Conduct Authority) took over the duties of regulating the credit industry from the OFT. In this remit they have a lot more powers than the FCA and are already making changes. Some firms have already had their consumer credit licences taken away, while others have surrendered their’s voluntarily.

Their objective is to make the high-cost credit industry consumer focused. Already we have had to modify our website to add warnings regarding the cost of credit. And our lenders are increasingly asking us to collect more information, for example we now ask for more details about your monthly expenditure, and we will soon be asking for more details. Whilst we realise this can appear burdensome, the objective is to both encourage consumers to think about how they spend their money and whether they can afford a loan, as well as helping lenders assess affordability of a loan.

At Payday Pig we are also planning changes which will make us more consumer facing. More to be announced…

(UK) PRESS RELEASE: Stop Go Networks responds to ASA Ruling

PRESS RELEASE: 28th February 2014

On the 26th February the ASA (Advertising Standards Authority) upheld a complaint made against the website Payday Pig operated by Stop Go Networks Limited (http://www.asa.org.uk/Rulings/Adjudications/2014/2/Stop-Go-Networks-Ltd/SHP_ADJ_250207.aspx).

 

Regarding the complaint itself,  we were informed on 11th December.  In summary the complaint was regarding the use of the term “slap up meal” in conjunction with the use of “cartoon imagery” were “irresponsible as they trivialised taking out a loan and encouraged frivolous spending”.

The complaint should be taken in context:

  • This was a single complaint received regarding a site that had not had its copy changed in nearly 12 months.  Our sites receive nearly 200,000 visitors each month and this is the only such complaint we have ever received.
  • In addition this complaint was received after an article published on 10th November in The Sun and written by Ed Milliband incorrectly identified Payday Pig as running TV adverts alongside children’s TV programmes (we have never advertised on TV).  This article was then “syndicated/copied” by The Daily Mail on 11th November and the inaccuracies spread. Both articles showed pictures of our website under the banner “Payday Pig – TV Advertising”.  How many people would have read these totally inaccurate articles?  Millions maybe? (We discussed the inaccurate and damaging journalism with the PCC but as things stand have not taken matters further).
  • The offending phrase was a single phrase in a site which goes to great lengths to highlight the cost of short-term borrowing and the implications of non-payment.

Ed Miliband_ I’ll stop payday lenders targeting our kids with their cartoon characters 2013-11-10

We reviewed all sites and immediately removed the offending phrase from Payday Pig, and responded to the ASA on 15th December informing them of this.  However the ASA said they would like to proceed to a formal ruling on the complaint as payday loans were currently under the spotlight and wanted to ensure that a simple change of wording was sufficient to address the issue.

We submitted our formal response prior to the deadline of 3rd February and received the draft recommendation on the 4th February.  At this stage the ASA draft ruling concerned the depiction of the Payday Pig as a money box, which they did not consider relevant to high-cost, short-term borrowing.  Again we immediately updated all imagery so that the pig was no longer a piggy bank.

We were given the final ruling on 14th February, for publication on 26th February (today).  This final ruling extended the draft ruling recommendations as follows:  “Because we considered that the use of jocular cartoon imagery and the reference to the use of borrowed money to fund a shopping trip or short break away made light of the decision to take out a loan, we concluded that the ad was irresponsible.”

With this in mind we updated our sites, and as they stand now we only refer to the use of short-term borrowing for emergency use.

We have supported and cooperated with the ASA at every stage of the process.  We operate in an evolving market which is directly under the gaze of the politicians. In such a market, regulations often change slower than what is considered “best practice” or “acceptable”, and such things are often a matter of judgement, with no hard and fast rules to apply.  Suggesting that one suitable use for a short-term loan is to fund a treat is no longer acceptable.

Stop Go Networks is committed to both regulatory compliance and social responsibility.  All our sites are covered by registered trading styles named on our CCL (Consumer Credit Licence), and are regularly reviewed by us internally and the compliance teams of the many lenders we work with.  Our support staff are all very aware of not only the current regulatory framework, but also sensitive to the needs of our customers and the wider implications for society, which was the matter of concern for the ASA.  We often receive emails from people asking if someone who is unemployed will qualify for a payday loan, or if they can take out a loan for 6 months, and the answer is always a polite ‘no’.

One lesson we have learned is that to be ahead of the curve we need to review the content of our sites more regularly, with a wider view than just compliance, as compliance is a relatively slow moving target.

SGN

The Pros and Cons of Moonlighting

Working two jobsIt’s no great surprise that, despite the economy being strained and large numbers of people finding it difficult to get work, a significant proportion of the population are working at least two jobs. The term moonlighting used to refer to someone who had a secondary form of employment, separate to their main source of income, which they worked during their ‘off’ hours.


Although this is still essentially the case, changes in the employment market have created new opportunities for additional earnings that are far less easy to define.

Most people associate moonlighting with a desire to earn extra money but that isn’t always the case. Although those who are desperately trying to pay off debts or find they simply don’t earn enough money from their day jobs make up the majority of moonlighters, some have other motivations.

If you want to switch careers, taking a part time entry-level job within your chosen profession while continuing to work your main job can be a great way to gain some experience of the new profession. Working two jobs also doubles the opportunity for networking – something that could could have a positive effect on your future career. 

There are also those who simply enjoy working and find they have too much time on their hands, even if their main jobs are secure and relatively well paid.

A report issued by Her Majesty’s Inspectorate of Constabulary at the end of 2012 found that 23,000 serving police officers – more than one in ten of the total working in England and Wales – have second jobs.

Police officers are allowed to moonlight if they seek permission from their superiors and stay away from pubs or private security work where there may be a conflict of interest. Despite these rules, investigations were carried out in hundreds of cases leading to 65 warnings and 10 dismissals for breaching rules.

Provided all your employers are aware of the situation and adjust your taxation accordingly, you are allowed to have as many jobs as you like. It is those who work a second job for cash or fail to declare additional income that risk difficult.

Modern technology means many people are able to moonlight from the comfort of their own homes. The Internet has led to a major growth in the so-called ‘shadow economy’ with an increasing number of people making money from selling items on eBay and other online marketplaces.

Though Her Majesty’s Revenue and Customs will more or less turn a blind eye to anyone selling a few items every now and then to de-clutter, many people are generating second incomes of tens of thousands of pounds from online sales but failing to declare tax or National Insurance on the money they make.

Last year HMRC launched a campaign to clamp down on this form of tax avoidance, using software which trawls auction sites and compares identities to existing tax records. Both eBay and PayPal have been known to release information about the identities and earnings of account holders to the police on request.

Those caught face fines of up to 100% of any tax owed – enough to almost wipe out any additional earnings for those paying tax at the higher rate.

Whatever your reasons for moonlighting, it pays to ensure you are operating within the law and being fully compliant with current tax legislation. Failure to do so could leave you seriously out of pocket.