Charity urges payday borrowers to fight back against lenders
Citizens Advice has launched a month-long campaign urging payday loan customers not to let ‘predatory lenders’ get away with treating them unfairly.
An in-depth analysis of 665 payday loans cases reported to the charity’s consumer services between 1 January and 30 June 2013 found that 76% could have grounds for an official complaint to the ombudsman.
The analysis found that a fifth were possible cases of fraud – where a person was chased for a loan they hadn’t taken out.
More than a third involved issues with continuous payment authorities including money that was not authorised to be taken.
Twelve per cent involved harassment whereby lenders pester people with phone calls and text messages rather than accept affordable repayment offers.
A tenth of the reported cases were over lenders’ unfair treatment of people in financial difficulties.
Citizens Advice chief executive Gillian Guy said: “The level of debt and hardship caused by some payday loans is absolutely scandalous and people often feel completely powerless to do anything about it. But consumers can fight back.
“If you are struggling to pay back the loan Citizens Advice can help you sort out a reasonable repayment plan and if you make a successful complaint to the Financial Ombudsman service you could find you get a refund for an unauthorised payment or compensation for unfair treatment.
“By making your voice heard you will expose the bad behaviour of lenders and put pressure on them to clean up their act which could help stop similar problems happening to other people.”
Latest figures from the Citizens Advice payday loan tracker revealed that 4 out of 5 were not told by their lender how to complain if there was a problem.
Consumers who are finding it difficult to raise their payday loan problem with their lender can contact the Financial Ombudsman who will help them through the complaint process.
There were 160 complaints made to the Financial Ombudsman between April and June this year about payday loans, with 72% upheld in favour of the consumer.
If a complaint is upheld by the Financial Ombudsman – and the consumer has lost out as a result – the lender can be ordered to put things right. Consumers could get a refund on loan repayments, interest or default charges or compensation for any inconvenience caused.
Advice tips if you’re struggling to repay a payday loan:
Your payday lender should accept a repayment offer which is reasonable.
Don’t be pressurised to extend your loan – it will cost you more.
It’s not ok for your lender to ring you during the night or more than once a day chasing you for money, or to contact your employer.
You should be able to get in contact with your payday lender.
If you are having these problems you can do something about it.
Make a complaint by filling in our simple checklist at www.adviceguide.org.uk.
Get advice from adviceguide.org.uk, from the Citizens Advice consumer service (08454 04 05 06 or 08454 04 05 05 for Welsh language line) or your local bureau.
Make a complaint about a payday loan direct to the Financial Ombudsman Service consumer helpline on 0300 123 9 123 or 0800 023 4567 or via email firstname.lastname@example.org.