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Credit Cards & Loans

FOS issues warning over payday loan broker scams

Samantha Partington
Written By:
Samantha Partington

The Financial Ombudsman Service (FOS) has received over 10,000 complaints since the start of the year about payday loan brokers taking money from consumers’ accounts without providing a loan.

Desperate consumers are being lured in by websites promising to search the market for cheap credit options. Consumers are being charged a fee for the service which many have told FOS they did not consent to.

In some of the worst cases, consumers’ bank accounts were debited multiple times without warning as their banking details were passed onto other credit broking websites.

Many people using the websites told FOS that they thought they were applying directly to the lender for a loan.

Senior ombudsman Juliana Francis said: “It’s disappointing that people who are already struggling to make ends meet are being misled into thinking that these websites will get them a loan.

“In too many of the cases we sort out, no loan is provided and people’s bank accounts have been charged a high fee, often multiple times.

“If money has been taken from your account unfairly or without warning, the good news is the ombudsman is here to help. Give us a call and we can put things right quickly.”

Last year the FOS received 4,726 complaints about credit brokering firms compared to 10,895 received from the 1 January 2014 to 12 August.

In the majority of cases, the business running the websites refunded the cash they had taken as soon as the ombudsman got involved.

In two-thirds of complaints it investigated, the ombudsman agreed that the consumer had been treated unfairly, while in the remainder of cases the fees had already been refunded.