loan reform

Its not interest.... Interest is how much you payback at the set time, you are talking about late payments, basically most users put a late fee on the loan under the contract, such as, say if i take a loan for 100k, i pay back 150k in 2 weeks, say im late one day and the contract states, "every day late for 5 days an additional 20k will be stacked on to the loan repayment, after 5 days a complaint will be made". So after 5 days of being late thats an additional 100k onto the loan, so then you will owe 250k as a payback to thus user, after a complaint is made. I think you are reading it wrong under their appeals, its not interest its late fees that people are doing.

 

People can decide for themselves if they agree with the contracts or not, if they don't agree then nothing will happen and the deal is off. resulting in no profit gain from the person loaning the money.
If you agree with the contract then it's your own fault if your extra costs due to late payments are high.

You're not forced to accept contracts.

 

^

 

I think I agree with _TANSTAAFL that debts are a problem.

Shotgunboy0130 typically the late fee for any arranged deal in the real world is interest. If you miss a credit card payment, the interest rate increases. Now, there are "late fees", but these are typically low amounts that are processing expenses more than anything else -- and per your example, real world "late fees" are not 13% of the outstanding balance. When you get into things like that, the only proper way to refer to them is as 'interest'.

I think a problem is that, a 13% "late fee" interest or w/e is just silly. Now, I haven't been looking through people's contracts, but I almost think excessive damages that can't be enforced are practically silly. The point of a hiked interest and additional late fees is merely to urge people to pay on time -- and make money... When an issue is out of control, then people go to court -- or in our case, the complaints...

So the real problem regarding an efficient loan/debt system is two parts.
1) people are making stupid deals that are outrageous and are setting lenders up for bad expectations, and setting up lendees for failure
2) there is no server enforcement ability

How to address #1:
Perhaps we should distill some real world deals to a format that works on ECC -- make a decent comparison -- and call that a baseline. At the same time, lenders need to realize that, if they file a complaint, and the guy is banned, the lender loses 100% -- and maybe the guy will get unbanned after a period and still owe nothing. So, we need to address the deals themselves -- if not with a server ordinance, then with some trials and education.

How to address #2:
We need a real system of server bankruptcy. This is really hard to work out -- especially with what staff can and cannot actually do. Now, we already know that Andrew and game admins can take money from ppl's balances. This is already done with applications and improper application fees...

So we need a system where if user-user deals fail, and the plaintiffs need to go to "court", the "court" needs some type of simple plan that can be instituted in most situations -- like principal + low compounding interest rate. Then the system also needs to be able to draw money at regular intervals from people's balances. If a person hides money in a sign to avoid a collection interval, then as soon as the individual has balance again, money is drawn till that interval is paid off. New problem: what if a guy then just harvests farms and stuff to give to other people? Well, all problems need working out... so cross that bridge as it comes...


but the basic idea of what I am saying is, beyond two honest people with good credit, our "loan system" is completly inadequate and rigged for failure. If we want a decent debt system, we need to actually start working it out.

 

It's pretty simple.

If you can't or don't want to pay extremely high interest rates, find someone else. No one is forcing you to pay their outrageous prices.

 

One thing to note here too, is that in certain cases where the user is banned and has to come back and pay something back, most often times staff will ignore late fees.

Even in a contract situation, they are not always enforceable or fair to enforce. Which fees are subject to repayment if something goes wrong, and especially if a ban for breach of contract is put in place, is completely at staff discretion.

And some people may call this unfair to not enforce something they did agree to, but when staff go through and make arrangements for things to be fixed/repaid, our top priority is minimizing damage to the person who has lost something. We're not here to make them a profit, which often times their late fees are created to cause them to make a profit off of something going wrong.

That being said, I fully agree with Lee

You agree to each contract on your own terms. You will never be forced to do a transaction with someone charging outrageous fees.

We do not have a ton of documentation on contracts and agreements, so I think what I'll take from this is that making a wiki article about contracts, agreements and safety should be near the top of my to-do list.

 

Well , from past experiences , I got a $20k loan , and I was forced to pay back 5k everyday I couldn't although I was banned for 2 weeks so I couldn't pay so $70k was added to the loan.

1) I had the money given to me to return.
2) I was banned for Scamming although no money was scammed or lost.
3) I think that if a user can pay back the original amount borrowed they shouldn't receive a ban for it.


K thnx bye

 

If you agree to a specific contract that includes late fees for a specific amount, or an amount per day, that agreement will be upheld by Staff as YOU agreed to those terms in the first place.

Once that user files for a breach of contract, no further late fees would be upheld (imo, anyway. this would depend on the contract terms and other evidence, etc).

You are an expert, icon, only on breaking loan arrangements, from all the complaints against you for similar reasons. You are hardly in a position to cry 'unfair' when it is you that is at fault for breaking the arrangements you made with other users.

**EDIT**

I am also still incredibly upset about the 90k I was scammed, either by you, or someone claiming to be you, that compromised another user's account, got in to my good graces, and also scammed/lost pere's melon sword. So, I think keeping your nose out of trouble, and leaving decisions about repayments, etc, for users coming back from a ban up to staff. We have all the information, we track the history of repeat offenders, and we'll be as harsh as we need to be in order to discourage further repeat offenses. /end rant

 

TL,DR

I make my loans 150% payback. However, for every extra day the person is late after the time period is up, they owe an extra amount of money. Thats not interest, its a late fee.

 

I was this person that received the extra 70k from Icondigi. Also, you weren't "forced" to pay it back. You agreed to it in the contract.

This.

 

Caveat emptor

Above all else

Can't say bad words, but we can fleece the hell out of every new 8 year old on the server.
Makes total sense to me.

 

You've -yet- to see absurd banking practices and fees until you see mine. These are the --easy-- ones, the ones I use when I loan money to staff members. All others get progressively heavier.

The Imperial Reserve Bank of Prussia's policy:

[1] Any user applying for a loan who is not president+ shall be immediately rejected.

[2] Any and all users requesting a loan will undergo an extensive background check, in which all posts on the forums they have made will be reviewed to judge the character of the user. Any complaints against the user will be reviewed and the bank president shall make the ultimate decision on whether or not a loan contract is to be put into place and the loan given.

Terms

Staff: Receive the first [3] days of their loan period free of interest, fees, or any other applicable charges. Upon reaching the fourth day (12:00:01 AM EST), back-interest shall be payed at [15%] accrued, compounded daily, then tallied up for each of the three days. From that day until the [7th] or [14th] day, depending on the terms of the contract, the loan shall accrue [12%] interest compounded daily. Upon the [8th] or [15th] day, a surcharge of $20,000 shall be added on for every day late until the [10th] or the [17th] day. Upon reaching such a date, a complaint shall be filed on the forums for breach of contract. Should a complaint need to be filed for breach of contract, no further loans will be accepted from that user in the future. The only manner in which any form of un-ban will be accepted is if the user pays, in full, the amount owed. This includes any taxes, fees, surcharges, interest-rates, etc.

 

Almost all of the responses in this thread have been missing this point from the OP

With exception of Sky who said she would work on a wiki for it.

I don't understand the double-standard that this server holds for the treatment of their less than adult population. We operate under the modus operandi that most users are young and treat them that way. But in SOOOOO many different ways we make it incredibly easy for these same youth to be taken advantage of incredibly easy.

A simple change like limiting the interest as a percentage or a cap on late fees would help protect these "young and innocent" users that I make it so I can't tell a dirty joke in global.

 

I agree. We should start treating them like what they, as a general group, are: Trolls! The ratio of trolling builders, whether it be advertising, spamming, or other various unacceptable things is intolerable. We wouldn't have this problem if we had a whitelist!

On the subject of 'limiting the interest', it really is the fault of the children for not understanding what they're getting into. If they can go through the entire, long process of having a contract made, why can't they understand that 850% interest is way too high and basically impossible for a new user to pay back? I don't think its so much the "youth" as it is just the people who fail to understand what they're getting into. If they can't understand basic math, do we --really-- want them on our server in the first place?

We shouldn't be trying to get the ECC-Government involved in more aspects of life it already is. When you join ECC, it is an economy server, not just a "here u go have some money buy stuff plz" server. If a new user is too young to understand the dangers of an economy server, then why would they be able to understand any of the more complex parts of the server? Basic economy states that you take advantage of anyone you can because if you don't, someone else will. If you make it so we can't have high interest rates, we will find a way around it.

 

Couldn't have said it better myself.

 

Is this really what this server is about?
teaching people how to take advantage of other people?
I sincerely hope not

 

Thats what a "Hardcore Economy" is, whether you like it or not. You don't get ahead by playing nice. You completely ignored my point in the first place: if someone can go through the whole process of making a contract and understanding the terms, why can't they understand that an 850% interest rate is too high?

 

I doubt they are the ones making the contract.
They are the ones copy and pasting and typing "yes"

It's still predatory lending whatever way you want to to justify it.