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back to article UK payday loaners cop MEGA £175K fine for 'misleading' SMS spam

A UK-based payday loans firm has received a £175,000 fine after it was found to have sent millions of spam text messages that provoked thousands of complaints. First Financial violated The Privacy and Electronic Communications Regulations governing electronic marketing by sending SMS messages without consent. The messages …

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Interest-ing

> payday loans firm has received a £175,000 fine

So can they be charged their own rates of interest for every day they're late paying the fine?

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Re: Interest-ing

Nah that'd be cruel and unusual punishment.

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Headmaster

Re: Interest-ing

Well lets take a normal pay day loan rate of wonga (since i cannot get on to www.firstpaydayloanuk.co.uk) their APR seems to be a mere 5853% which means if they are one month late playing they would end up owing £852 562.50, and if they are one day late paying they would only pay a mere £28 000 per a day.

Should be enought to cover cost of Hired goons if they fail to pay

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Re: Interest-ing

No, you're a bit off, they will only have to pay GBP28.5k per day (if the rate is indeed 5853%p.a.) Peanuts...

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Re: Interest-ing

Actually, it's a bit less than £2,000 a day* (for the first day). I suspect you have no clue how compound interest works.

* (58.53^1/365) x £175,000 = £176,962

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Flame

Re: Interest-ing

£175K is peanuts for these companies. A personal fine of that level for each company director, with a threat of a year in jail for second offence, is what they need to get the message across. Or they could just ban them, isn't usury still a criminal offence?

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Re: Interest-ing

@Chris Miller: only if you compound the interest every day. Is that how these loans work?

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Re: Interest-ing

That's how APR is calculated. It's useful for comparing things like mortgages and car loans, but (since it has to include all the costs and expenses) produces vast numbers for a small loan lasting a few weeks.

Most of these companies charge about 1% a day (simple interest) on top of a small admin fee. For comparison, try working out the APR for going overdrawn on your bank account for a day, or being a day late paying off your credit card (you're going to need a calculator with a lot of digits).

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Re: Interest-ing

Daily compound interest? That's a fracking robbery....

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Re: Interest-ing

"£175K is peanuts for these companies".

Exactly. So they have to make do with Chateau Margaux '97 at lunch for a few days, instead of the good stuff. Big green deal.

What those guys need is a good LARTing.

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Anonymous Coward

Re: Interest-ing

Daily compound interest? That's a fracking robbery....

Well all interest charged of a period of time can be divided down into the equivalent daily rate to give the same overall amount when applied as compound interest. This amount can then be compounded up to a 365 day period to give the APR rate. And if you think that 5800% is high then you should see what the equivalent APR would be if the fees banks charge for unauthorised overdrafts were considered to be loans which needed to be adverstised as with an APR rate!

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wtf?

"The fact that this individual tried to distance himself from the unlawful activities of his company shows the kind of individuals we’re dealing with here."

Well I suppose it means he's not a complete idiot.

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Re: wtf?

he sent out thousands of message with direct links to websites operated by his own company.

Are you sure he's not a complete idiot?

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Re: wtf?

He runs a payday loan shark outfit. What more do you need to know to figure out what kind of individuals you are dealing with.

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Re: wtf?

Not a complete idiot ?

Apparently the proprietor Hamed Shabani tried to remove his name from the company's entry at Companies House once the investigation began.

Like that would work when there are dozens of websites that mine the Companies House site and publish lists of directors.

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Pay day loaners

It's is interesting to see the government acting decisively against pay day loan companies, but I can't help comparing it to the large banks who are quietly allowed to commit serious crimes week in, week out, right under the government's nose.

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Re: Pay day loaners

It's a matter of who you are: If you're slightly less poor than those around you, aggressively ripping people off to get rich the government will understandably come down hard on you. If on the other hand you have more money the government they seem to develop bit of a blind spot...

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Re: Pay day loaners

I don't suppose there are many non-exec directorships going on the payday loaner boards.

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Re: Pay day loaners

See the "tax net" mini-cartoon in the current issue of Private Eye. (I'd post a link, but the Private Eye site doesn't seem to have published that particular one).

Two kids fishing with a net. It's about the size of a thimble, so it can only scoop one little fish at a time while the big ones swim unconcernedly by. One kid says, "It's a tax net!"

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Facepalm

Report offending spam texts to your network operator by sending them to 7726.

I find the worse offender is my network operator, does this still work for them?

(Actually it doesn't matter as on my phone there is an option to mark the number as spam and I never see a text from it again. Brilliant).

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Anonymous Coward

Re: Report offending spam texts to your network operator by sending them to 7726.

"I find the worse offender is my network operator, does this still work for them?"

I have to do this with the many SPAMs I get from EE - seems to work...At least I have the pleasure of SPAMing them back, even if they still send them.

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Coat

Re: Report offending spam texts to your network operator by sending them to 7726.

"Report offending spam texts to your network operator by sending them to 7726"

Handily, that number is also the interest rate of the pay day loan company sending the spam texts, so easy to remember.

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Anonymous Coward

Re: Report offending spam texts to your network operator by sending them to 7726.

7726 is SPAM on a phone's keypad - even easier!

I have to agree though, they didn't go out of their way to advertise this, like actually telling anyone or anything.

This is the first I've heard of it. Maybe they should funnel that £175,000 fine into a TV or radio ad?

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Re: Report offending spam texts to your network operator by sending them to 7726.

They did tell people, but only by sending a text message to their own customers at the time they implemented it, meaning that as not all networks implemented it a the same time it was easy to miss it if you happened to switch from a network that hadn't implemented it to a one that had.

So, for example, I was on Orange when they made the service available and had a text, but O2 had already rolled it out when I switched to them, so I knew about Orange's service but not O2's - at least not until I looked for it.

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Mushroom

Simple solution to these leeches

See Icon

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Anonymous Coward

Spam SMS

I always reply to spam SMS I receive, electing to receive a followup call from them. I play along with the call for a bit, consuming their time and patience, and usually end up being passed over to a supervisor where I proceed to express my irritation, politely, that they are employing an SMS spam company to advertise their services - it's very rare that the loan/PPI/ambulance-chaser company has sent out the spam themselves, and they seem to think this absolves them of blame or responsibility.

If I've still managed to keep them on the line (many hang up), I try and encourage the sales agent to think more deeply about the repercussions and impact to people that their sometimes-borderline-immoral service has. Usually the response is "I'm just doing my job", although sometimes they've not really thought about it, so I hope in some small way I can contribute to rotting these companies from the inside.

It's also sometimes fun to encourage them to spout more and more ridiculous lies (yes, they do lie quite blatantly if they think they might get a sale), and then call them out on it.

What a strange idea of fun I have!

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Stop

wait

why am I just finding out now I can forward my spams to 7726 .. This should be publicised a bit better ..

I wonder if its going to make a blind bit of difference though

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Devil

Re: wait

Yes it will make a difference; it will inform them that you saw their message and reacted. This will lead to more messages being sent to you because you bother to read them :)

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Re: wait

That 7726 number has been around for years. I've been forwarding SMS spam to if for five to eight years or so. (Can't remember exactly). I have noticed that in the past couple of years I am getting replies thanking me for passing it on, and asking for the phone number the spam was sent from.

It is nice to see something gets done with this information now. I certainly notice less repeats of spam messages compared with spam in past years.

As to fines... yeah... £100 per SMS sent out should be a better scale. A fine that should be paid by the directors of the company. Otherwise stuff like this just gets written off as a company expense.

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DJO
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"Mega" just don't mean what it used to.

Am I alone in thinking that £175,000 is a rather low fine for the actual offence?

The article states "millions of spam SMS Calls" so let's say it was 3 million then the fine is 5.8p per SMS, I would like to see it nearer to 50p per message to be a valid deterrent.

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Re: "Mega" just don't mean what it used to.

50p is not enough. Make it 50GBP and split it with the spam recipients.

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Re: "Mega" just don't mean what it used to.

Certainly "mega" does mean what it used to mean, but the headline writer should have said "kilo" for £175,000.

</pedant>

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We're dealing with rocket scientists here...

They avoid detection by using unregistered cards, then put their website in the SMS.

This is so stupid I can't think of an analogy, maybe a thief breaks into your house and leaves a card behind saying "I couldn't find any money, so here are my bank details so you can make a donation at your convenience".

Nope, that's not stupid enough.

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Anonymous Coward

caps irony?

as in "MEGA"?

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Devil

Forget fines

Just take their license away for a first offence - that might make them sit up and take a bit more notice!

Icon reflects what I think of these companies...

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Go

Re: Forget fines

Go one step further. As well as taking their licence away on the first offence, all loans they have issued are to be immediately cancelled, with no requirement of the borrowers to pay off the loan, indeed making it a further offence if they try to chase the borrowers.

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Anonymous Coward

£45 a pop

Sending a single spam text is arguably a crime so it works out at less than £45 a pop. Perhaps the Government could set a tariff, say £50 a pop for first prosecution, £100 for second and doubling thereafter.

Another thought: make any loans to anyone who responded to the spam text unenforceable by the company. That would stop the mischief overnight.

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"Any monetary penalty collected from First Financial as a result of the ICO's latest enforcement action will be paid into the Treasury’s Consolidated Fund."

Any monetary penalty; doesn't sound like they're too hopeful of collecting on this...

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Thats ok, their own debt collection agency can recover the money.....

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Are we missing a point...

There are always going to be scum out there that will try this.

Mobile operators should be forced to suspend sims used like this until they've validated the sim somehow - a bit like a captcha. How hard is it to notice a new sim being used for stuff like this?

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Hi mate how's u ?

........................messages included some falsely claiming to be from the recipient’s friends, included SMS messages such as "Hi Mate hows u? I'm still out in town, just got £850 in my pocket from...............

Do people really address each other in that way ? I'd think only if they're the kind who thought Ali G was a real person.

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Pirate

The Best Treatment.......

......for Hamed Shabani is a hell where you receive spam texts and phone calls continuously 24 hours a day.

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