Bizarre payday loan problem - repaying by credit card

David1345

Hi - sorry this is a long post: I've had a weird experience with one of the major payday loan companies and would really appreciate some advice.... Thanks in advance if you have time to read this!

Basically I recently tried to get myself out of the payday loan cycle by repaying in full on a Mastercard. But it's all gone a bit bizarre... The story so far is:

1) Using the loan company's live chat service I asked if I could repay my loan on a credit card. They said yes, that's fine, and, as usual, took my details, processed the payment and cleared the loan.

2) A few days later, sure enough, the loan is showing as settled in full, and the payment to them is showing up on my Mastercard statement. Job done. But then...

3) The following week the payment to them disappeared from my Mastercard statement. It's now not there at all, and the balance has reverted to what it was before. So...

4) I called my credit card company - who said they can see no record of the payment ever having been made.

5) So I try live chat with the payday loan company again (whose website is still showing my loan as settled in full) and ask what's going on.

They insist that the loan is settled and everything's fine. However... when pressed to double check, the operator said "I am sorry you were misinformed: we do not take credit card payments, only debit card payments." But then she added, weirdly... "However the payment has been received and the loan is repaid in full." I challenged that a couple of times but that was her line and she was sticking to it.

6) So now I'm in a bizarre position of having repaid my payday loan in full with magical fairy money that doesn't exist...

My question is what happens next and what I should do? I'm assuming that at some point the Payday loan company will do an audit or something and realise they haven't had the money after all. Or the credit card company will do the same. One way or the other, one of them will work out something's gone wrong.

I just want to resolve it but if both parties insist nothing's wrong I'm not sure what to do... My biggest concern is a) That when one of them finally works it out they'll try and charge extra interest and b) If the loan company suddenly demand a debit card payment, I don't have that much money available in my current account.

Anyway - sorry that's such a long post and if you've made it this far - many thanks. Whatever happens next I'll be staying away from payday companies in future... If anyone has any advice or a good guess as to what will happen next that'd be very kind.

thanks!

brightonman123

get a statement from the payday people asap, confirming paid off.

put money aside to pay later, just in case!

Hax

I'd agree with brightonman123 - get them to send written confirmation that it is settled, and then save up the amount you have just paid for when they realise they've not had their money. If they then challenge you in the future, you can happily dispute any extra charges they try to add and offer them settlement equal to the amount you believe you have currently paid - as a goodwill gesture

David1345

Thanks guys. I'll try that. Wonder how long they'll take to do an audit.

It's a pretty weird way to operate... I can't get over the way the live chat operator insisted that they had received my credit card payment, but, in the same sentence, that they don't accept credit card payments... :think:

Anyway, thanks for your help.

voytovdwiof

It's probable they're seeing an authorisation charge as the actual payment, it's unlikely the operator has access to the company accounts and only a brief overview for each customer, so they'll be able to see "paid" because the system doesn't distinguish between the two types.

From what I understand with regards to using a CC to pay off, the major issue is charge backs. You could take out a payday loan, "pay" it back and then in 50 days do a charge back, this would leave the loan company in a sticky position. It's also possible you're not allowed to pay off debt with a credit card, but I'm not sure on that.

Hax

voytovdwiof wrote: »

From what I understand with regards to using a CC to pay off, the major issue is charge backs. You could take out a payday loan, "pay" it back and then in 50 days do a charge back, this would leave the loan company in a sticky position. It's also possible you're not allowed to pay off debt with a credit card, but I'm not sure on that.

I would also imagine that if you used a credit card to pay back a pay-day loan, the credit card company would treat it as a cash advance.