Lend Us A Coupla Quid, Mate!
In the Philippines, large numbers of people do not have access to the sources of credit which are commonplace in the west. So what do you do if you don't have (and can't get) a credit card, and you can't get a bank loan (because you don't have a bank account), and you need to borrow some money? Simple! You go to someone who operates a 'five six' business.
'Five six' describes the amount you borrow and the amount you will pay back. For example, borrow 500 pesos and pay back 600, over the agreed time period, which could be as short as a week. It's easy to understand, even if the interest does seem exorbitant. And, of course, it is exorbitant, but borrowers have nowhere else to go (except another 'five six' operator).
I'm not sure of the exact legal status of such schemes, but there is certainly no shortage of people operating them, and they are not short of customers either. Not surprisingly, the term loan shark is often applied to 'five six' operators. However, there doesn't seem to be any regulation to speak of, and 'consumer rights' appears to be an alien concept, yet to take hold in any meaningful way.
With that as background, here's a screen grab of a section of a webpage run by a company who operate in the UK, and go by the name of NowPayDay.co.uk. They describe themselves as "the bridge between consumers wanting payday loans and the payday lenders themselves."
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You probably looked at the pretty smile first (I did), and possibly asked yourself if you would like to speak to her (before you told yourself that she's probably not actually one of their team anyway). A pretty smile always catches your eye, and maybe it even makes you feel less outraged when, later, you notice the APR of 1737%. I imagine that even the 'five six' operators might think that's over the top. Probably not, though. More likely they would be envious, wondering how they could migrate from a 'five six' to a 'four five' business.
If you'd like to know more about 'five six', there's an informative article here. And if you are wondering how I came to know about that webpage, it was a link in an email which ended up in my spam folder (where it belonged). Just out of curiosity, I sometimes take a peek in there to see what scams are being pushed. Not that the above is a scam - it's not. All the info is right there for everyone to see. Bold as brass!
