Sitting back, post regulation, those companies that made it through can remember the journey. A payday company that played a large part in the industry shares its story from the first launch until now. In the present payday business climate, like many others, this payday company has reported losses of up to 35 million pounds. This can be compared to 2012 when the company announced a profit of 60 odd million pounds. Let’s see what happened from then to now.
In the beginning, there was a payday company
- This company was born in 2007. Two entrepreneurs got together to found a payday company.
- In the same year, they launch the company website online. The payday company offers loans up to 1000 pounds. Short term high-interest loans that are easily obtained and just as quickly paid back.
- In 2008, the company has fully launched its product. There are 40 employees n London and a development team in Bulgaria. The founder claims to have served 50 000 customers during this beta-version phase of the companies development.
- The company goes on to advertise their product using somewhat unconventional methods. This arouses condemnation from campaigners like Labour MP Stella Creasy.
- In 2011, Stella Creasy continues her fight against what she calls ‘legal loan sharks’. She called for a cap on the cost of borrowing from the payday company.
- This payday company also won the Digital Entrepreneur of the year by the Guardian.
- Still in 2011, reports that the company has been lending money to people on benefits as well as information of the website that students could take out a student loan.
- The OFT (Office of Fair Trading) looks into the matter and investigates 50 of the largest payday companies.
- This payday company makes the changes that are requested by the OFT.
- During 2012, controversy mounts against all payday lenders. The industry is accused of unfair debt collection practices, exorbitant interest rates, and cheating clients on websites.
- By the end of 2012, it reports that it has trebled its earnings.
- At the start of 2013, our payday company reports that it wrote nearly 80 million pounds off in 2011.
- March 2013 sees the OFT give all payday companies an ultimatum to change their evil ways
- Archbishop of Canterbury attempts to take down the payday industry by competing against them with his credit unions.
- In October 2012 the FCA (Financial Conduct Authority) is charged with the job of regulating the industry, mostly by cracking down on existing practices.
- In November 2013, George Osborne charges the FCA with the job of putting a cost cap on lenders. At the same time, one of the top executives takes a step back from running the payday company.
- In July 2014, new rules were set out for all payday companies. Many companies leave the scene.
- By September 2014, the payday company announces that profits have fallen by 50 percent.
- Once again 220 million pounds are written off for customers that were more than 30 days in arrears.
- The interest rate is cut in December 2014 in order to meet the cost cap.
- In February 2015, this payday company announces that 325 jobs will be cut. Approximately one-third of the workforce.
It has been a long journey for the payday lender, and not always a pleasant one. Alongside all the outrage and controversy about the people that the payday lender ends money to, or as many would like to think, reels in and traps, there is still a company. A payday company, out to make a buck like the next guy.