HSBC recently announced that they will no longer be offering holiday loans, due to the inherent risk involved with them. This is similar to what many tax preparers have found in America. Many of these tax facilities were offering unsecured holiday loans to their customers, based on the projected amount of their tax return. It was understood that the customer would come back to get their taxes done at that company and the money from their return would be used to pay off their holiday loan. However, many decided to simply go to another company, get their money from the IRS and never pay back their holiday loan to the original tax preparer.John Hewitt of Liberty agreed with HSBC’s decision, stating, “I’ve been saying for the last 13 or 14 months that I don’t like those products at all. It’s just too risky, too fraught with fraud, and just too many fees for the customer.” What many people do not realize is how expensive a holiday loan can actually be. Amanda Toth, an independent tax preparer stated on whether she would recommend a holiday loan, “I would tell them: Don’t. Same thing with doing something that is slightly fraudulent–it’s going to come back to haunt you sooner or later, in some cases. And it’s always going to happen when you’re down. It never happens when you’ve just won the lottery.”
Related reading: Holiday Loans
Comment on this article