“Fast” credit mania in advertising sends a coded signal to the desperate

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Fast loans, quick loans, approval in just 60 seconds.  What is the speed of borrowing money?

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Fast loans, quick loans, approval in just 60 seconds. What is the speed of borrowing money?

OPINION: The addiction to quick loans, quick loans, loans in just 60 seconds is not all it seems.

There are rules in the Responsible Lending Code for the promotion of credit.

I spent a sad few hours aligning lenders’ online advertising with these rules.

The Code states that credit advertisements must not mislead, deceive or confuse borrowers, and lenders are prohibited from advertising “no credit reviews”.

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If an ad contains a reference to an approval speed in minutes or hours, it must also contain a clear reference to responsible lending.

This column will suggest that some lenders are sailing close to the wind.

Take the advertising ban “without a credit check”.

The Financial Capacity Commission has compared common loan types with borrowers’ financial knowledge.

Type “no credit check loans” into Google and you will find lenders who have paid for their links to appear at the top of your search results.

The lenders whose ads surfaced were Loan Place, Loan Spot, Lending Crowd, and Swoosh Finance.

Searching for

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Searching for “loans without credit check” on Google shows that the top four lenders that pay for their links appear at the top as ads when those words are searched for.

I actually believe that no one gives credit without a credit check after looking at what they say on their websites.

But they advertise to people with such poor credit ratings that they’re desperate enough to look for a lender who might not look at their history.

All of the four lenders’ websites have prioritized speed.

Loan Spot’s home page advertised “approval time three hours” and “online application in five minutes (or less)”.

There was no mention of responsible lending that I could find on the page that made these claims. It was elsewhere on the site.

Loan Place’s homepage said: “Make a decision in just two hours!”

Responsible lending was mentioned in a footnote at the bottom of the page.

Lending Crowd claimed: “100% anonymous offer in just two minutes!”

I couldn’t find any mention of responsible lending on the landing page I pulled this from.

Swoosh Finance had a rather muted landing page, although the Google ad that came up when searching said, “Serious quick loans – no credit history required.” Fast approval, friendly service and hassle-free repayments. Get your money in no time. Apply online in minutes, get approved in an hour and get paid today. As simple as that.”

Swoosh Finance Google Ad on Thursday 16th June.

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Swoosh Finance Google Ad on Thursday 16th June.

All of these easy loans were advertised as potentially cheap.

Swoosh’s lending rates ranged from 6.35% to 18.95%. Lending Crowd calculated 6.45% to 17.23%. Loan Spot and Loan Place offered financing from 7.95%

Last week I applied for a loan from Gem by Latitude to verify their “8.99%+” claim.

I was offered 20.99% interest which was ridiculous given my credit history, age, home ownership, debt free status and time with my current employer. It all seemed like a terrible mistake, although I haven’t gotten to the bottom of the matter yet.

So what are these quick/quick/quick claims all about?

They’re code words. Lenders and sellers like fast because it gives people little time to think.

Borrowing can be an act of desperation for people in marginal financial circumstances who are struggling to make ends meet and pay the bills.

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Borrowing can be an act of desperation for people in marginal financial circumstances who are struggling to make ends meet and pay the bills.

Borrowers want fast when they are scared and embarrassed. They want fast when an experience is so psychologically painful that they want it to be over. Fast suggests less inconvenience. Pulled tooth? Don’t worry. It will not take long.

Fast is what you want when you’re panicking to pay a bill when you’re in such a state you’ve been putting everything off until the last minute.

Fast is coded language for something that is simple and not overly intrusive, and if it ends with a “no” then at least five minutes, not five days.

Fast is the enemy of good borrowing.

GOLDEN RULES:

  • Credit must be used with great care
  • Consumer credit makes lenders and retailers richer
  • They make you poorer

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