PREDATORY MARKETING and the Vulnerable in Society II

An earlier blog titled PREDATORY MARKETING and the Vulnerable in Society provoked several questions from the BU family. A BU family member (Wonderer) was motivated to to put in some leg work on behalf of the BU household to seek clarification. Unfortunately the effort although appreciate by the blogmaster raised more questions.

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400 WhatsApp messages sent to clients in December 2019

Today I called the Bank Supervision Division of the Central Bank of Barbados (CBB) and asked who supervises all the pop-up Ready Cash Lenders, Money sharks and Poor Predators.

To my dismay, I was told NO ONE.  CBB regulates Banks, Financial Services Commission (FSC) regulates Insurances and Credit Unions. CBB does not regulate rates of interest either.
I asked: “So I can register a firm at CAIPO and lend money at any rate of interest?” Yes. As long as it’s your own money and people are prepared to pay the terms.  Thinking faceUnamused
Barbados government does not care about Bajans.  That anyone can come here or be here and set up to rake money out of the citizens at such usurious rates and draconian terms is appalling. It’s scandalous.  This is sure to have a far-reaching effect later or some time down the road with so many people being laid off simultaneously.
Where else are firms allowed to pop up and operate, and no agency or association in place to monitor or control them?  Not to mention that all other, reputable, money lending firms have an association or a League and professions have an Association to regulate how their members behave.  Who ultimately is benefiting from this callousness?  Where are all these supernormal profits going?  If the government is collecting taxes on these 30%s and higher why is the country cash strapped?
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Is it true Ready Finance and similar companies are unregulated?

24 comments

  • Predators on the loose, so why is anyone surprised the government enabled this clear case of loan sharking. You may ant to check to see who have shares in these entities and are silent partners hiding in the dark like cockroaches.

    Liked by 1 person

  • What an easy way to launder money. Pay day lending is like a super-washing machine. Our financial regulators are the most incompetent, and simple minded in the world. Look at how they force banks to interrogate people with dormant bank accounts and allow money lenders to escape. The idiots, many with degrees in economics and book keeping, are dumb.
    But we are world class, punching above our weight.

    Liked by 1 person

  • I find it very interesting (and saddening) that this post has received very little attention. This is, IMO, a /very/ serious matter.

    Even the “Great” US of A is dealing with this kind of immoral and truly predatorial corporate behavior against low-income peoples. It truly can ruin people’s lives! Please invest 16 minutes and 31 seconds of your life to watch Last Week Tonight’s John Oliver’s report. High bandwidth, and very disturbing!

    If the policymakers don’t do something about this, the only thing we “normals” can do is educate the public.

    Like

  • @Chris

    Many here lack the capacity to deal with matters outside of a comfort zone. Predatory behaviour in the capitalist system we practice has gotten out of hand. The regulators staffed by an army of occupation have not done the job. By whatever benchmark applied, they have fallen short and continue to do so. Like several institutions setup in Barbados to protect/represent the consumer they are failing. It belies the education budget WE pay a premium.

    Liked by 1 person

  • Vincent Codrington

    @ David Bu
    @ Chris Halsall

    Is predatory pricing/marketing / lending a problem in Barbados?
    Barbados, like other countries, may have its poor but they are not greedy, covetous nor foolish. Sufficient for today is the evil there of. We have no intention of importing issues that do not affect us.

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  • @chris
    “The regulators staffed by an army of occupation have not done the job”.

    “Many here lack the capacity to deal with matters outside of a comfort zone.”

    Once I bought my son a toy train with all the bells and whistles. It also has the feature that if you added a little water, steam went up like a puff of smoke.

    Was a lot of fun to play with my son in the basement, but the lad grew up and no longer plays with his toy train.

    Might not be a lack of capacity, maybe we are just tired of playing…

    Liked by 1 person

  • @TheOGazerts… You actually were quoting David, but I copy and understand your message.

    I would argue, however, that while this is a game, it’s one which must be won. Or, at least, played forcefully for as long as possible.

    We, the “normals”, must take back our worlds from this kind of (at best) amoral behavior by entities which exist for one sole purpose: transferring wealth from the many to the few.

    The game will take decades. But it must be played.

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  • @Vincent: “Is predatory pricing/marketing / lending a problem in Barbados?

    Yes. And likely going to get worse over time as more players enter the market, particularly considering we’ve just discovered that the space is completely unregulated.

    For a single data point, I employ a guy who once a week comes to help me with the gardening. He was once /badly/ burnt by a Courts “hire-purchase” contract. I won’t go into the deals, but he was simply the co-signer of a purchase. He also recently came to me to sign an employment document so he could get a few hundred dollars from one of the Lone Shark outlets. I refused, and instead gave him an advance on his future work with us, with the promise that he never get money through such a usury arrangement.

    My apologies if this comes across as sanctimonious, but the concept (and ramifications) of compound interest should be taught from an early age.

    Like

  • Vincent Codrington

    @ Chris Halsall at 3 :20 PM
    Thanks for the share. And thanks for counselling your gardener. That is the only effective manner of handling sharks.
    Interest rate computation has been on the Primary School Maths syllabus for over a century. School attendance is also mandatory in this country.
    Creditors are also required by law to inform the borrower of the true rate of interest. Loan sharking ,like drug pushing is also illegal.

    Like

  • @Vincent

    You cannot have it both ways. You want us to go with your anecdotal or have robust oversight framework in place to PROTECT consumers.

    Like

  • de pedantic Dribbler

    David there is a flip side to your statement that “It belies the education budget WE pay a premium.”

    That education premium should by now have educated the masses of few Latin phrases , specifically here: caveat emptor…. I agree with your assessment @ 1:56 above except for that key inclusion.

    We are educated, so in somuch as we are being badly protected by some of our regulatory offices its vital that we put our knowledge and awareness to better use.

    If I may , I would also like to offer a tale about a relative to make a point here: my niece was in ‘primary school’ about 8 years at the time. She had arranged with a class mate to exchange some collectibles of which they shared an interest. So said, so done… but some days later the classmate explained how important it was that she get back the items held by my niece and would return those she had to my relative some time later….. Bruggadung….con consummated. My niece took forever to get back her stuff.

    I was totally flabbergasted when I eventually heard this tale as I was blown away by the conniving nature of such a youngster. My point: My niece at 8 years was naively trusting (as one might at that age) but I gently remind her (to her scowls 😂) and EXPAND on the type of incident with her whenever I can to ensure she does not get conned in adult life !

    So the institutions may be there to protect us but we have to be smart ourselves. Caveat emptor!

    The bigger concern in this era of drug lords being made ‘acceptable’ and rampant corruption all over is the point raised by @Austin: What an easy way to launder money. Pay day lending is like a super-washing machine.

    Whether pay day lending or attractive terms for easy-to-get big ticket purchase loans this washing machine cant have a ‘do nothing’ examiner looking on like the Maytag man!

    Like

  • @Vincent: “Interest rate computation…

    But is the ramifications also being taught? Particularly within a personal finance context?

    In Canada, I remember being taught about exponents fairly early, and how interest rates are an example. But I don’t remember being taught anything about finance in grade school; certainly not how compound interest works within a budget planning context. Not even in the “home economics” classes which were mandatory until (I think) grade 8 or 9.

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  • de pedantic Dribbler

    Ok… it seems @Chris and @Vincent covered my point as I wrote: knowledge is power …along with robust protection (@ David)!

    Liked by 1 person

  • Vincent Codrington

    @ Chris Halsall

    Interest rate computation only makes sense in a financial context at the primary schools. Exponents are taught in 6 th form and at University levels in our Education System. There is no excuse for not knowing.

    We educate our citizens in areas that are useful and useable in their lives. Education is not for the purpose of traumatizing the young nor to allocate them to a place in the social pecking order as is propagandize by some commenters.

    Like

  • @Vincent: “Education is not for the purpose of traumatizing the young nor to allocate them to a place in the social pecking order as is propagandize by some commenters.

    Could you please expand on this thought? I truly do not understand what you’re wishing to communicate.

    Like

  • Vincent Codrington

    @ Chris Halsall.

    My apology.
    I should have prefaced that with @ David BU. It was meant as a reply to his intervention at 4:00PM.
    In any case, you had partially addressed his concern with the reminder of ” Caveat Emptor.” Buyer beware,. We cannot employ public servants to police every activity.

    Like

  • @Vincent: “We cannot employ public servants to police every activity.

    I strongly agree with David’s argument. There must be effective consumer protection in this (and many other) space(s) — unconstrained the pure capitalist entities will maximize their returns using whatever means possible.

    While education is, of course, critical, our environment should not be such that everyone has to be able to do exponential math in their heads to be able to navigate the many sharks.

    Further to David’s point, I second the argument that many of our current enforcement entities could and should be doing their jobs better…

    Like

  • Agreed Chris, buyer beware is a generic guide to consumer awareness BUT it does not absolve the regular from protecting consumers and by extension the integrity of the market place.

    Like

  • Any of you old people remember the itinerant vendor aka ” coolie man ” ?

    Like

  • Predatory lending was always around: Merchant of Venice- Shylock
    Modern day Shylocks same thing.

    Like

  • @Skinner: “Modern day Shylocks same thing.

    Perhaps this could, and should, change.

    Like

  • @ Chris Halsall
    It never ceases to amaze me that those who defend capitalism are always so shocked when confronted with its realities.
    Crumbs from the table of the wealthy is what capitalism means. It was so in the days before and after Shylock
    and it remains to this present day.
    Those of us who manage to get more than a few crumbs always pretend we don’t know the brutality of the capitalist system.
    Pray tell what is the difference between the IMF and the predatory lenders. Same difference. The exploitation of the weak by the political monetary complex.
    Good luck !

    Like

  • Vincent Codrington

    @ Hants at 5:46 PM of 20 Jan.

    Yes . I do remember the itinerant Indian salesmen. They provided credit on essentials to the poor… mainly clothing. . The price they charged included the costs of providing a service the poor country folk needed. For most it was a win /win situation. Of course the purchasers had choices and they exercised the one that satisfied their requirements.

    Like

  • After the predators get you they get you again when you cannot pay or pay on time. So its high rates upfront then late payment fees or no payment fees.

    Like

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