The credit industry in uk is rotten and most people are really not aware of how bad it really is. So let me tell you as a brief disclaimer. I have worked in the uk credit industry for a long time about 14 years, and i've worked in sectors ranging from super prime loans, all the way to subprime lending and credit cards with really high aprs. In fact, i didn't only work in these companies.

I'm unfortunately responsible and had a big role for a lot of the growth in this industry. I've worked on the design launch of lots of credit cards by companies like new day, tesco bank 118 money and many many others. I've also worked for wildcat one and, as a consultant, i've worked with a ton of these types of companies. Anyway.

The point is, i know, a thing or two about this industry and i'm really really happy that now i get to help people improve their financial situation and understand money better instead, so what is it that specifically, is rotten with the credit industry? Well, i'm not going to bore you with a long rant about high rates, and all of that i'm sure you already are aware of all of those things. But let me get straight to the point. This is the really ugly part if you think about the spectrum of different kinds of credit. Where do you think is the big money made many people? Probably guess it's the super premium credit cards right like the american express platinum cards, that's where all the money's made people go and spend loads and loads on those they earn.

A huge amount of interchange, there's almost no risk, because these people are so rich and wealthy. That you know all of them gon na, be paying all of their money. So that's where all the money's made right - or maybe maybe it's the huge mortgages that people take out. That's where the big money really is made, or maybe it's the people who use car finance to go and buy themselves a brand new car every three years.

Well, here is the real answer. The highest return in the credit industry by far is owned by subprime and near prime lenders when it comes to pound-for-pound percentage earnings. Absolutely nothing bit beats high-risk credit, and this industry has had absolutely no shame in profiteering from people who can afford to pay money. The least sure these types of loans, credit cards have really high numbers of people who don't pay the credit and charge off and default on their payments, and the credit company will lose money on those people.

But when they're charging loans, which are 39 35 69 or even a thousand percent apr, it doesn't really matter because, even after you take into account all the people who have charged off and stop paying and all of the costs associated, they still earn ridiculous. Somewhat disgusting levels of money for many of these credit companies, they can be earning even in the sort of relatively modest neoprene space as much as 10 per year on a total amount of money that they've lent out and some credit card companies actually achieve that. Some of the subprime and guarantor lenders can earn considerably more than that and the battle for the subprime customer, who has really bad credit, is one of the most fierce battles in terms of customer acquisition in the entire world of finance. Subprime lenders are prepared to pay a huge amount of money to attract these customers.

The brokers and comparison websites that go and take those customers through google and through advertising and then send them on, can get paid hundreds of pounds per sold loan. In some cases, the amount here can be a thousand pounds or even higher for selling a sub prime loan, and then you get to the debt collectors and debt management companies and all of that kind of jazz and referrals here are just as bad and just as Lucrative it is possible to earn, in some cases a decent monthly wage for a single person just for referring one poor subprime customer to one of these debt management companies. Just look at my channel. I primarily talk about general personal finance topics and investing.

I earn money from ads being thrown in my videos and my average cpm uh, which is cost per million, which is the number of dollars i get per thousand views of. My videos is roughly 21 or 15 to 16 pounds. Now. Some of my videos do a lot better and some do a lot worse.

But do you know which video consistently outperforms all others in terms of earning the highest relative amount of money per view? Well, out of the roughly 200 videos that i have on my channel that i've made so far, the only one video that i made about bad credit is it. It has averaged an average of 36.77 in cpm. This is insane uh we're talking huge, huge or like roughly double what my other videos are earning. Four people who have bad credit.

The good news is that the fca has actually done something about this over the last few years, starting with wonga, the entire payday loan industry got decimated really hard by a whole combination of different factors: tightening legislation, increased scrutiny, customer complaints that were being upheld by the Ombudsmen and more recently, the guarantor loan sector seems to be taking a massive hit as well. A huge volume of customer complaints recently has come in, and amigo loans went from being the huge player only 90 of the market to negotiating with his customers on the size of the compensation and being on the brink. As per the news has been coming out over the last few weeks, but the credit industry for bad credit hasn't gone away. It's just had a bit of a rebrand.

Instead of selling these people, loans and various kinds of high cost credit, many have decided. Instead, they can sell them. Debt management plans, they're gon na help them instead. So these sound like they were gon na, improve the customers abilities and make repayments.

They're gon na work with them, they're gon na, be on their side, but they continue charging super expensive fees and continue to fleece the exact people that they're pretending to help with these new helping products, and these companies continue to pay huge amounts of money to attract Customers to them so that they can go and pretend to help them, they will pay hundreds and, in some cases, thousands of pounds. I am not exaggerating for every customer who gets referred to them, who then goes and takes out one of these helping policies with them. So next time you go and see one of these ads on the internet or a youtube, video or a website that goes and there's a friendly recommendation for one of these services. That is why they're doing it, because they get paid a huge amount of money for referring people to these sharks.

Now many cases there is pretty much no help actually given whatsoever. In the vast majority of cases before typical customers get referred, the customer could go and take the exact same steps themselves with very minimal education and actually a very minimal amount of effort without having to pay the huge fees in the process, and these companies continue going And sharking around trying to find people with the worst possible life situations, people who are in financial trouble, people who are in high levels of debt, because that's when you can make even more money by putting them even further into the red. For some reason, this practice is perfectly legal and the fca is perfectly okay, with the fact that this friendly credit card company that you've signed a deal with will go and sell your debt to one of these debt collection agencies or somebody else, and in many cases The amount of money that is paid for these customers is obscene, so for customers who stop paying their credit card debt, for example. In some cases you can earn as much as 30 to 40 of the total outstanding debt from the debt management company.

Who will buy that debt off your hands and what happens then is the friendly nice company that you used to deal with as a customer selling gets replaced by they're, much less friendly and a lot more aggressive and a lot more intimidating debt collector? Who suddenly has slightly less morals when dealing with you and when trying to recoup the money? Now? All of this is just to make a quick buck out of someone who is in financial trouble who genuinely needs help? Who genuinely needs to be able to get information out there get education and get somebody to offer them a helping hand. So maybe at some point some of you will begin looking at it, but as it stands, it continues being the exact same story. I hope you guys found this useful if you have make sure you smash the like button so that more people can go and see this video. Thank you so much for watching.

I really really appreciate it and, as always i'll see you guys later.