Beware of Loans Direct - £50 membership fee charged

My grandson aged 19 just finishing college, is desperate to purchase a van now he's qualified as a Plasterer. However instead of asking the family if they can 'put to' for a cheap van for him until he earns a few bob, he decided to enquire on line for a 'cheap' loan (hmm!) Loans Direct jumped at the chance to help him ....by taking £50 !! out of his bank account as a membership fee.

At this point he told us what had happened as he was annoyed about the £50 deduction from his bank account. His mother told him to ring the company and tell them he wanted to cancel the membership and received a refund as he has no income to pay a loan if he did get one. The person he spoke to at Loans Direct persuaded him not to cancel that he may need their services in the future.

He complained to me about it at this point (I'm his grandmother) I hit the roof and told him how foolish he was getting involved in this and said I'd help him get his money back. Can anyone advise me how he can get this so called 'membership fee refunded? I only wish I'd trained as a solicitor so I'd know the law about these things.:(

MSE Official Insert: Right of Reply from Loans Direct UK

GENERAL INFORMATION

Loans Direct UK are not a lender but an online membership service that charges a one-off fee of between £50 and £70.

We are registered with the OFT and their Consumer Credit Licence number is 0628451. Our company registration number is 6907433.

Membership gives you access to a range of financial products, discount offers and tools for managing your money. We will look at the personal details you provide at the point of sign up and will try to match you with a suitable solution but, membership does not guarantee that you will be approved for a loan. Nor does it guarantee the amount you will be able to borrow or the interest rate you will be charged. We don't carry out credit checks ourselves.

If you have a query about your membership you should contact our customer service team on 0844 3091 936. Our call centre is open from 8am - 9pm Monday to Friday and 10am to 2pm on Saturdays.

If you wish to cancel your membership you can do so by writing to: Loans Direct UK, Office 8, 10 Buckhurst Road, Bexhill on Sea, East Sussex, TN40 1QF.

GENERAL QUESTIONS

We have received a number of queries regarding our service so here are our official responces:

1) Fees are taken out of customers' accounts without authorisation, using debit cards, the details of which are purportedly taken for identification or credit check purposes only.

Official reply:
"The only time our website asks for card details is when a customer is signing up to membership. Our website is very transparent, and we clearly state the membership fee. At no point do we suggest that card details are required for anything other than the payment of a membership fee”

2) Payment of fees is taken though loans are offered for an amount, which is below the amount needed and requested by customers.

Official reply:
"When a customer signs up to membership they provide approximately 30 pieces of information about themselves. We have a computer system that matches these individual details against our database of financial products (we have about 200 products including loans, credit cards and debt help solutions) We then suggest solutions that we believe to be suitable for the customers individual situation.

Our system is also integrated with a range of loans, so sometimes we can tell the customer immediately if they have been accepted for a loan with a particular lender.

At no point do we guarantee a particular loan amount or APR, as this is ultimately down to the customer’s individual chosen lender.

Sometimes loans are for smaller amounts than the customer initially requested, due to their individual situation. Other times, we recommend debt help solutions if a loan is not suitable.”

3) Payment is taken though the customer has cancelled the request for a loan.

Official reply:
"Membership includes more than just finding suitable loans. We also provide customers with exclusive discount deals, money saving advice and access to their credit reports. Therefore, simply not proceeding with a loan will not automatically cancel a customers membership.

If a customer would like to cancel their membership then they will need to contact our call centre on 0844 3091 936. We are available Monday – Friday 8am to 9pm and 10am – 2pm on Saturday’s.”

4) Loans direct processes an application fee knowing that they will not be able find customers a suitable lender.

Official reply:
"We only accept customers who have matched at least one product on our system and we therefore believe we can help. Customers are under no obligation to proceed with any of the solutions we recommend for them”

5) Loans Direct offer customers loans from companies which have already rejected their application or which are unsuitable because no guarantor is able to guarantee the customer's loan application.

Official reply:
"We ask customers to tell us which lenders they already have debts with. As well as those that they have already approached and been unsuccessful with so we can rule those lenders out of our recommendations – so this would only ever be the case if the customer has forgotten to tell us some of the lenders they have previously applied with.

Some popular products do require guarantors, however the customer is under no obligation to accept these products – if they indicate that these solutions are not suitable we will continue working for them until we find a solution that does meet their requirements.”

6) Loans Direct operates a scam

Official reply:
"We absolutely do not operate a scam and it is slanderous and libellous to suggest otherwise. We hold a consumer credit license that was issued by the Office of Fair Trading, we have a no quibble refund policy and we deliver a highly valued service to our large base of customer, many of whom come back to us many times to meet their financial needs. If a customer is not completely satisfied with the service they've received they simply need to contact us via phone or email to discuss. Queries of this nature will be dealt within 24 hours and response will be issued over the phone and confirmed in writing."

7) It is difficult to obtain a refund from Loan Direct.

Official reply:
"We have a 100% refund policy for any customers who are unhappy with the service they have received. To discuss a refund with us you are simply required to contact us via phone (08443091936) or email (support@loansdirectuk.net). Our call centre is open Monday to Friday from 8am to 9pm and Saturday 10am to 2pm, we do our best to deal with all refund requests on the same day."