A bumper two week edition!
Most people reading my blog will already have heard the news that Amigo is trying to get the FCA to agree to a Scheme of Arrangement. My estimated numbers – with a lot of assumptions – show a dismal return to customers mis-sold loans. It’s hard to imagine how the FCA could think it is acceptable to let a business walk away from its responsibilities like this.
For a couple of articles that you are less likely to have seen, I suggest: What to do about financial Velociraptors? and America’s hollow middle class.
Tweet of the week
— 𝙱𝚎𝚗 𝙲𝚕𝚊𝚒𝚖𝚊𝚗𝚝 💚 𝙹𝚘𝚒𝚗𝙰𝚄𝚗𝚒𝚘𝚗 (@imajsaclaimant) December 25, 2020
Potential Scheme of Arrangement Amigo announcement.
- my article on the announcment Amigo seeks refuge from complaints in a Scheme of Arrangement and a later article looking at some estimates of possible payouts Amigo Scheme – my estimated numbers don’t look good
- BBC article: Amigo Loans: Bid for survival with plan to cap compensation.
MyJar enters administration FCA: MyJar Ltd is a high cost short term lender, otherwise known as a payday lender.
What to do about financial Velociraptors? Barclays Final Notice and FCA Regulation An academic blog: regulatory arbitrage is historically a central characteristic of consumer credit markets. Should we treat corporations, as Joel Bakan suggests, as ‘psychopaths’, ‘programmed to exploit others for profit’?
Klarna et al:
- Buy now pay later: young risk debt using ‘predatory’ credit-linked discounts Times (paywall) Martin Lewis, a financial campaigner, told The Times that he was worried that increased use of the schemes would “catastrophise the finances of young people”.
- UK watchdog bans Klarna Covid shopping advert Guardian: Instagram campaign deemed ‘irresponsible’ for urging people to cheer themselves up via ‘buy now, pay later’ service.
- 840,000 private tenants in England and Wales could be behind on rent Guardian: Landlords’ group calls for more government help because of Covid ‘debt crisis’.
- Tenant left homeless over a £700 debt: The letting agencies illegally evicting people during the pandemic Independent: ‘Rent-to-rent’ agencies have been linked to an explosion in illegal evictions as tenants struggle, and the problem is expected to get much worse as unemployment rises further.
Mum who gave dying man CPR hit with £100 car park fine for ‘overstaying 14 minutes’ Mirror: She received a £100 penalty charge from Euro Car Parks, and appealed offering proof of what had happened, but it was rejected.
NatWest pays thousands to fight PPI claims in court Times (paywall): Although the deadline for PPI claims ended in 2019, the new refund demands are based on a different set of rules.
This year saw Britons pay off £15.6bn in personal debt in seven months – will we continue to purge the plastic? Mail: the richest fifth of households swelled their bank balances by close to £400 a month between March and September. However the poorest fifth were around £170 worse off, as they were less able to cut back on spending over the same period.
From the US:
- The Unconvincing Case for a Public Credit Registry Credit Slips: Public provision just isn’t a solution to most of the market failures in credit reporting.
- America’s hollow middle class Vox: The cost of living has risen, wages have not, and debt just keeps on accumulating.
Benefits & other news
Gambling addiction ‘should be treated as a public health issue like alcoholism and smoking’, academic report says Mail: Time spent at home and increased feelings of isolation because of coronavirus have fuelled an epidemic of people becoming hooked on online betting, researchers found.
First time on Universal Credit: ‘Even with a maths-based degree, it’s hard to understand the system’ iNews: Rhys does not believe Universal Credit is reliable enough to depend on fully. He never truly knows how much he will receive every month until he is told.
Scrap benefit cap to lift 150,000 children out of poverty, says charity Guardian: Suspension of cap on universal credit would cost less than summer’s ‘eat out to help out’ scheme.