Written By: - Date published: 2:26 pm, September 3rd, 2008 - 114 comments
Categories: labour -
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For any of you who thought the sharp end of capitalism was a nice place to be, the front page story in today’s Dom Post should change your mind. It’s about the lending practices of the loan sharks that have flourished in the twenty years since New Zealand had neo-liberalism foisted on it.
And it’s not pretty. According to the article Super Loans in Porirua is lending money to people at a rate of 8% per week. That’s 416% per annum. And it’s right across from the Work & Income office.
Of course this situation isn’t new. Porirua has six such ‘money lenders’ listed in its yellow pages alone. Manukau has 12.
Helensville has none.
Ponsonby has none.
Mt Victoria has none.
Fendalton has none.
So you’d expect this not to be an issue for those who represent upper middle New Zealand but when Judith Tizard and the Labour party palm the issue off:
Consumer Affairs Minister Judith Tizard said the Government was monitoring the situation – especially in Australia – and planned a discussion paper, but ruled out a cap on interest rates.
You’ve got to wonder if they remember what side their bread is buttered on. It’s part of the folk law of the 2005 election campaign that it was the turnout in Manukau and Porirua and all the other places ‘Labour’s people’ live that gave them their third term. It would pay for them not to forget that.
So Labour put up legislation regulating loan shark parasites and see who opposes it. At the very least it will let your ‘people’ know who still stands for them.
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Scoopit!
The media grabs a trivia reason for borrowing money, no surprise really from them. I have worked with clients who have been crippled in debt, one whose children was going to inherit his debt to his dispair. Why did they borrow?
Funerals was often a reason and I think myself the cost of a funeral can be expensive to anyone as most of us want to provide a good send off for our loved ones. Funerals are a sudden one off huge expense and coming up with the cash when the banks are not interested – leads on to the money lenders.
Lenore – You can’t “inherit” debt.
I’d hope my loved ones would feel no compulsion to have an expensive funeral if I died. I’ll be dead, and the last thing I’d want is for them to wind up with a large financial burden on top of everything else. Burn me up and throw me off the top of a mountain and I’ll be happy. Anyone who is goign to be dissapointed because they were just turning up for beers and cake isn’t particularly valuable to me anyway.
Whatever the reason is, money lenders lend to people who shouldn’t be lent to – it’s not in the best interests of a borrower open to exploitation.
Borrowing without a realistic plan to repay is financial suicide. There is no way you can possibly not end up f*cked. I think most of the problem is that people get into debts with repayment periods of several years, while their personal financial horizon is usually about 6 days.
Just heard wind of a case where a person bought a car priced at $8000. Entered into a five year deal….$27 000. But here’s the clincher. They were somehow persuaded to give over $1000 so that a ‘kill switch’ could be installed to be used if they missed payments.
Now, that’s not loan sharks, just commercial traders.
T-Rex
Although you can’t inherit debt in a generational sense you can certainly inherit debt from a former partner. It pretty common for a pile of debts to become apparent (because the ex was a gambler for example)
And the repo guys are beating a path to the front door and………
Bill – was the switch for the car, or the person? If the latter, I think that might be illegal.
Tempted to say it should have been…or maybe no point ’cause the switch was thrown way back.
Swampy you’re a retard. I said there was no point engaging with you and you’ve demonstrated that beautifully.
If only there were a blog dedicated to right-wing Act-style libertarian bullshit that you freaks could all piss off to.
Oh hang on, there are heaps of them but no-one’s the slightest bit interested in them. Gee I wonder why…
Bill – Fair point, though Lenore did say children.
Your example isn’t inheritance of debt anyway. That’s being party to a debt you’re not aware of!
And I’m not actually sure how that works legally. I’m pretty sure the debt is void if the person signing the borrowing agreement didn’t have sole signing authority for the security being used.
Of course, most people aren’t that fussy about signing authority with commonly held relationship assets. I probably wouldn’t be…
Sad thing to happen.
Well that’s your problem Felix. You may not agree with what I write but there is a lot more substance to it than just flaming because you don’t like my politics.