Iain Mac

It's a start...

Chip

iTrader: (3)

Ginge, any new on these rules you mentioned mate, that I asked about a few days ago?

Genuinely interested in info about them if they do exist, Or was it just more of your usual maybe up bollocks?

twinkle_2k86

This is going to sounds stupid, but when I got a loan years ago now for my car, when I was applying for the loan, I had to prove my income, and not just for a months, but for 6 months, every pay slip for 6 months I had to take in, before they would even sit down and calculate if you can afford what the payments would be. Haven’t gone back for a loan, so no idea if this still happens.

Only thing I do remember is, the figure I wanted, they said, did you want more, as you can. Now I keep sane, and said now, and stuck to what I wanted, and could afford.

The other thing, not that long ago, mortgages. It always use to be 3 times you annual, plus 1 of partner. Now my mate got 5 times his annual, plus 1 partner. That was the only way they could buy their house. To me they where stupid to agree this, but that’s me. That must of been well above what they could afford, but still got it. It might be ok at the time for what ever reason (over time etc) but in 25 years, you can’t tell me things wont change financially. And I think this is where allot if not most, become in debt, cause something’s changed and can no longer afford to repay.

Loans, credit card, mortgages, are the biggest risks you can take, and can break you if they go wrong, This is what people do understand, and you can call them stupid for not realising this.

Ginge !

chip i am just refereing to things i have heard from the finance people at my place who say they have to be licenced and have to be carefull of the rules there are inplace, i dont deal with finance,,,,,, you write software,,,,,, but OBV know EVERY rule as they must train you the same as we train our IT guys the rules when selling car parts and the terms of warranty,,,,,

as for getting the list,,,,,, you expect me to look up every fucking rule in finance just to answer your question as the only proof i have is the finance commenting about they have rules to follow and cant set up loans unless they go into the guidelines

sorry but even though im off work with a fucked back and shoulder i still aint that bothered to look into this as it serves no purpose as NO MATTER the outcome,,,,, fuck all is there to benifit my life in the slightest,,,,,, but you still belive there are NO RULES in loaning money governed,,,,, even though you cant just give loans but you have to be licenced to give finance ????

seems pointless having a licence when there are no rules to actually go by but then,,,,, you think im a moron for thinking that

Chip

iTrader: (3)

So no basically you dont know of any laws regarding lenders requiring proof of affordability, you just pretended to know what you are on about and made it all up as a case of 2+2=73 because there happen to be some internal rules at your place that are nothing to do with law, so you decided that must mean there are laws as well.

Thanks anyway for your time, even if it was a complete waste of mine even trying to discuss it with you

Iain Mac

The Consumer Credit Act does make it an offence to lend or engage in certain activities related to lending, such as debt collection or credit counselling.


It also sets out rules about cancellation rights when agreements are entered into away from trade premises, and the calculation, advertising and display of the APR, etc.


From 1 February 2011 the Consumer Credit Directive comes into force and, for the first time in years, it stipulates that lenders should take account of the borrower's ability to repay:


2. Creditworthiness and adequate explanations – (Chapters 7 and 8)
11. Creditors are required to assess the borrower’s creditworthiness before granting credit or significantly increasing the amount of credit. The assessment must be based on sufficient information, obtained from the borrower where appropriate, and from a credit reference agency (CRA) where necessary.
12. Creditors must ensure that the borrower is provided with an adequate explanation of the proposed credit agreement, for example the particular features of the agreements, the cost and the consequences of failure to make payments, to enable him to assess whether the agreement is suited to his needs and financial situation. The explanation must cover certain specified matters, and must be provided orally in certain circumstances. The borrower must be able to ask questions about the agreement, or to ask for further information or explanation.

Chip

iTrader: (3)

Iain, interesting info, yeah I have to conform to the stuff about APR etc when I display information in my software as its client facing, and number 11 you have quoted there sounds like a castrated attempt at a step forward with regards affordability (kind of vaguely like Ginge was saying I guess, so thats a for me taking the piss out of him although the reality is that clause is meaningless but it does exist at least) although sadly that point is of course utterly pointless of course as still only reliant on the word of the borrower which is the whole problem as the majority of the defaulted loans that Ive seen details about where related to people who lied on the forms, often encouraged by agents to do so, as I already mentioned earlier in the thread.

The problem is with doing anything more than "guidelines" to actually make it really the responsibility of the lender to prove affordability is that lenders simply dont have access to reliable information about borrowers in the first place so there just isnt any room to manouvre with really trying to put the responsibility on them to make decisions the borrower has to make about affordability.

Iain Mac

Personally I think there should be a central register for everyone's indebtedness to be recorded and reported on, but the Civil Libertarians would scream blue murder at that, and I don't have a lot of confidence in the Government/Civil Service to run it properly or efficiently.

In the good old days there was an effective monopoly on credit reporting but not all lenders used it, and some only took info from it without feeding in their own data.

Nowadays there are at least three different credit reference agencies and lenders are free to choose whether to use one at all, if so which to use, and finally whether to supply info into the system or only to take info from the data provided by others.

Chip

iTrader: (3)

Yeah, we use credit scoring on the various systems that I work with for a few different companies but its notoriously unreliable TBH, the moment someone lies on the forms, it more or less falls over completely.
Without things changing dramatically in terms of a lenders real access to your personal info any "laws" are nothing more than just pointlessly ticking a box that you can claim to have attempted to act responsibility but with utterly nothing meaning anything at all, the only way you can fall foul is to basically not collect any info, which obviously no company would fall foul of anyway.

Iain Mac

I was involved with the validation of a credit scoring system back in 1984/5 - basically it involved looking at various characteristics on application forms for loans and searching for trends on the ones that had a satisfactory payment history and comparing them to the applications for loans that turned out to have poor payments records.

Of course, you will never know whether a declined loan would be good or bad, but we also analysed those applications.

Some of the traits that ended up being important included partner's length of time in his/her job, and whether you had a home phone or not.

Things we had always thought were important, like time in job, type of job etc, were a lot less clear cut.

The important thing was that customers didn't know WHAT was being looked for because, in the absence of a way to verify the info being provided, as soon as someone lies the whole thing falls apart.

My old boss of the day hated this new-fangled stuff but he had to agree that the patterns were there. Mind you, he refused to lend to ex-forces because they had spent too long being told what to do and when to do it, then getting their wages as pocket money with all their bills already deducted - his view was that in civvy street they couldn't adapt. Sadly for me, he was right in too many cases when I tried to give them a fair crack at being grown-ups.

Chip

iTrader: (3)

I just pass the info to the systems that do the validation so havent been directly involved in that side of it so cant comment on what gets the most weight in our systems but we dont even collect info about partners etc in the first place, so if that is involved it would have to be data from other sources held with the credit scoring companies etc.

Total minefield TBH that side of things IMHO, especially as like I mentioned earlier in the thread most historic data is of little relevance to day, and all the systems are based on historic trends etc!

Psycho Warren

iTrader: (5)

I do wonder when they will remove the expiry of bad debt on credit files.

If peoples bad debts could be seen for life then people would learn an important lesson when they can never get credit again!!!

At present its too easy to get loads of credit, default on it and do it again in 4 or 6 years when your credit file has cleared down

Ginge !

yeah but people who have done that tend to learn from there mistakes and alot of cases these people spend 5 years not getting credit that they learn to live without it or loan as little as poss

me for example, i got into large debt for my age, i paied it all back and now i wont get a loan for anything, i have a overdraught that is a safety net and a credit card i use for online ordering

i wont get a loan to repair a car or holiday ect or even buy a TV or funiture even with the zero interest deals as i dont wanna get caught back up in that situation

some people live there life on loans, pay them off and think " ill just get another to spoil myself" or buy cars on them,,,,, never for a car as it looses money quicker than you pay off the debt but thats my opinion which,,, dont mean much as i waste money on loads of crap i dont need