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Ping Trees

An odd name – and many of us will never have heard of it, but its big business, and if you have ever applied for a payday loan it probably has affected you.

If you apply for a payday loan on-line you have to fill in your personal details into the website.

But many of the websites aren’t actually lenders themselves, but brokers. They sell your information, to the actual payday lenders. The bidders are payday lenders who pay as much as £75 for your information. They then offer you the loan. If those first line of lenders don’t buy your information, its passed down the tree to other lenders.

As the “Guardian” in the article below explains, nearly half of the payday loans come through ping trees. Its the opposite of a normal fee you pay to a broker, where the broker tries to get you the best deal. Indeed you are likely to be directed to the worst deal, and of course the payday lender has to recover the cost of the ping-tree commission, so in the end its added into the cost of the loan.

Its this sort of business model that led us to create the Oxfordshire Credit Union. By giving members a way of saving, and ensuring those savings are then lent onto other members who need to borrow, we help our members steer clear of these sorts of businesses.

https://www.theguardian.com/money/blog/2014/nov/01/payday-loans-ping-tree-lending-broker

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