The criticism is aimed at those companies offering short-term, instant loans to customers searching for a quick-fix of money for a while of your time. But they are they really badly because they are made out to be?
Back along, loan sharks preyed on the vulnerable, lending large amounts of money, without checking a victim's capability to re-pay after which charging extortionate levels of interest when regular payments were not met. Furthermore, loan sharks terrorised neighbourhoods, were often involved with illegal drug-related activities and resorted to acts of extreme violence in order to redeem their 'investments'.
The high street pawn-broker offered a bit more for an individual, struggling to meet the requirements of the financial crisis or in will need a quick injection of money. More often than not, the pawn broker would offer the customer a small fraction of an item's value in order to make money out of somebody else's poverty and despair.
Hire purchase schemes and mail-order catalogues offered low-income families the chance to buy bigger and better, all around the 'never-never'. Interest rates were over-inflated and goods were over-priced. Repayments were advertised in pence each week, diving in seem insignificant and affordable.
Nowadays, under the scrutiny from the internet and media, modern-day lenders need to meet stringent guidelines on who they give loan to, how much they will lend and need to set out clear and concise repayment terms, all prior to the customer applies for the loan. So have pay-day loans companies finally found a way to clean up among the oldest professions?
Lenders need to be licensed through the Office of Fair Trading. Advertising of these loan companies is scrutinised heavily through the Advertising Standards Agency and adverts are also subject to the customer Credit (Advertisements) Regulations 2004. All this, coupled with an insurance policy to become up-front with fees and loan rates of interest, implies that the industry hasn't been so clean or regulated.
Most of the on-line loan providers operating today use advanced technology to make lending quicker, simpler and much more effective. Their clients can finally approach a range of new lenders safe in the knowledge that they don't have to barter their goods in exchange for a pittance of money, will not become the victim well over inflated goods or hidden rates of interest and can possess the safe and secure knowledge that their loan could be repaid in a fixed, mutually agreed term.
But a lot more than this, customers can finally borrow money on the short-term basis without the threat of violence or intimidation hanging over them.