Creditors & Their Responsibilities - HELP!!

stateofmind

Hi everyone

I am after some advice on the responsibilities of a lender when a borrower faces financial hardship.

In a nutshell, this month I am about to default on a payday loan with a company who are unfortunately notoriously bad when it comes to helping customers. I have had the loan for a long time, continually paying the rollover fees and on a £570 loan I have probably already paid over £1000 in interest charges alone. The interest is currently over £200 per month (it was £75 a month for 10 months then last 2 months at £225).

I am now no longer in a position to keep rolling it over and meet these repayment, so I emailed them asking for them to freeze all interest and to enter into a payment plan in order to reduce the loan to 0. I have offered, what I consider to be, reasonable instalments of £90 per month but they have simply come back and said 'we do not offer repayment plans, interest and charges will continue to be applied until the loan is settled'.

Do lending institutions have any obligations to assist those borrowers who are facing difficulties? The charges these companies apply are hideous and this will escalate from £800 to several thousands very quickly if I don't do something about it. Every other payday loan company has agreed with minimal fuss to the payment plan, but these are just point blank refusing and they are also telling me that they cannot remove my work number from their system as I asked not to be called from work

Can anyone advise me on what to do here please? They are going to push me hard and harrass me come payday and I really want to avoid this.

Thanks!

ILW

Why are you having a problem with the repayments?

Tixy

I doubt very much that payday loan companies have signed up to the (voluntary) lending code, which does contain info about dealing with customers in hardship.

The should still follow the OFT guidance on debt collection but notoriously break it and the OFT cannot do much except gather evidence of consistent problem,

Do you still have the same bank account as you took the pdl out of? If so I would suggest reading this thread and opening a new bank account ASAP, its the only way that they might agree (and stick to) to a repayment plan.
Dealing with Payday Loan Companies

You can do a data protection request to get them to remove your work number from their systems (although I think they have a month to action it) - bottom of this post http://forums.moneysavingexpert.com/showpost.php?p=11571485&postcount=4 again if they refuse all you can do is make a complaint to the ICO.

But if they continue to add on fees & charges that were detailed in the terms you agreed to when you took out the loan then they are entitled to do so.

chalkie99

ILW wrote: »

Why are you having a problem with the repayments?

I imagine that has something to do with this immortal line:

Every other payday loan company has agreed with minimal fuss to the payment plan,

stateofmind

Well I have 2 bank accounts with the same bank, the one they have the details of I have cancelled the card (reported as stolen) so they cannot collect the payment this month.

I'm not trying to avoid the loan, I want to pay it back, I just don't want it to be this hard!

Seems to me that the OFT do very little in regards to the way these companies operate, I've been looking on a lot of forums and it seems everyone complains to them, but nothing ever happens!

Tixy

If you read that thread I linked to you will see that reporting your card as stolen is not enough to stop most pdl companies from taking payment. They will simply try to take it direct from your account (its in the small print of most pd loans that they can and will do this). Lots of cases on that thread and all over MSE of them still taking payments after a card is cancelled.

You really need to leave no money in either of your accounts with that bank and open a new account with an unconnected bank and have your income paid into that account.
(if you leave money in the second account your bank may honour the pdl company payment from account 1 and then offset funds from account 2 to pay off the overdrawn debt).

skintandscared_2

There are hundreds of threads on here regarding payday loans and what is very common among them is the fact that cancelling a bank card makes absolutely no difference - they can still take their payment. You need to change your bank account completely. Have you approached one of the free debt counselling services like CCCS to try and negotiate with the payday loan companies on your behalf?

stateofmind

chalkie99 wrote: »

I imagine that has something to do with this immortal line:

Yes I do have other creditors which is why I am in this mess, but that's not the issue I am asking about, I am after some advice as to whether they have any obligations to accept reasonable payment offers

The concern is I won't pay them, they'll keep adding charges and then it will escalate way out of control - I am trying to face up to this problem otherwise it will never go away

skint - there is no money going into that account so they won't be able to take anything. I'd rather not go down the CCCS route but will have to if these don't play ball, it's the last one I need to sort out then I would have no need to use the CCCS

tixy - is that true? I really hope they won't take it out of my other account - if I have no money in account 1 then I try and buy something online for example, they never honour the payment and take it from account 2 so I don't know why they would with this company? I would have thought they'd just decline the card payment. I will have to get my salary transferred into my savings account which they cannot touch as soon as it goes in - it's too late for me to redirect my salary now via work as I get paid in 2 days

This is a bigger issue than I thought now!

Tixy

Is the savings account the same bank? If sothen they could still offset any money from that if one of the other accounts goes overdrawn or pass your overdraft facility. As soon as you get paid I would transfer the money to an unconnected bank account - and any money in your savings account.

It depends on whether your bank decide to honour the payment request from the pdl company (its not a card payment though so what goes for card payments won't necessarily follow for this). If they do honour the payment and you go overdrawn then the bank can choose to use the right to offset to take money from any other account you hold with them.

RichGold

stateofmind wrote: »

I want to pay it back, I just don't want it to be this hard!

How hard it is now diametrically opposes how easy it was to get and spend the money in the first place.

Payday loans are easy to get, but often hard to get away from.

stateofmind

Very hard to get away from. They encourage an endless cycle of lending by offering you topups etc, I think you'll be hard pushed to find someone who has just 1 payday loan at any one time, most people tend to have more than 1 and then it spirals out of control.

Sadly, I've had more payday loans than you've had hot dinners.

Given I've paid them very handsomely over the last year, I thought (hoped?!) maybe they'd be a bit more reasonable with me but it appears not.

I am just unsure how to respond to their email of 'we don't accept payment plans'