payday loan problems - ask the ombudsman

acid53

thank you for the reply - appreciate that you can still investigate the complaints but obviously if the outcome is that they must pay redress and there is agreement that there are funds set aside then it could make the complaints process worthless. To that end, it would seem very unfair that minicredit ride off into the sunset with very sizeable profits and the customers they have wronged are left standing

Perhaps you can advise in more detail?

financial_ombudsman_representative

acid53 wrote: »

thank you for the reply - appreciate that you can still investigate the complaints but obviously if the outcome is that they must pay redress and there is agreement that there are funds set aside then it could make the complaints process worthless. To that end, it would seem very unfair that minicredit ride off into the sunset with very sizeable profits and the customers they have wronged are left standing

Perhaps you can advise in more detail?

Hi acid83

There would’nt be an agreement set up to set funds aside when a business is winding down as there is no obligation for them to do this.

At the moment minicredit are still trading and have not been placed in liquidation, this means that we can still look at complaints against them as normal.. Because they've said that they are closing down, it may be best to raise a complaint as soon as possible.

If you have already complained to minicredit and you’re not happy with the outcome then you can bring the complaint to us and we will look into it as normal. As it stands at the moment, if we feel redress is due then we can ask them to pay this to you.

If you would like to discuss your situation in more detail, please send us a private message or give us a call on 0300 123 9 123.

Kind regards
Sarah

acid53

thank you for reply

Santa1983

Hi

After checking my credit file recently, I found a default from a PDL provider from 2011. I contacted them and they say they have a document showing I borrowed £60. They have now requested £200 and refuse to remove the default. I moved address a couple of years ago however my Experian File was updated. I have no issue in repaying what I owe ( I genuinely forgot to update them with my new details in 2011 ) however I am frustrated that 1- I have a default for the paltry sum of £60, 2- they refuse to negotiate the removal, 3- they refuse to provide me with any documentation to show that they tried to contact me after I missed the repayment.

I am not trying in anyway to dodge my responsibilities - I am just frustrated about the situation and the fact that this company waited over 3years to ask me for their money when 'apparently' they state it was a 30 day loan.

I have asked them to provide me the original document and their attempts to contact me and as of yet have not recieved anything.

What is the best route to go down to resolve this situation ?
Thanks in advance

financial_ombudsman_representative

Santa1983 wrote: »

Hi

After checking my credit file recently, I found a default from a PDL provider from 2011. I contacted them and they say they have a document showing I borrowed £60. They have now requested £200 and refuse to remove the default. I moved address a couple of years ago however my Experian File was updated. I have no issue in repaying what I owe ( I genuinely forgot to update them with my new details in 2011 ) however I am frustrated that 1- I have a default for the paltry sum of £60, 2- they refuse to negotiate the removal, 3- they refuse to provide me with any documentation to show that they tried to contact me after I missed the repayment.

I am not trying in anyway to dodge my responsibilities - I am just frustrated about the situation and the fact that this company waited over 3years to ask me for their money when 'apparently' they state it was a 30 day loan.

I have asked them to provide me the original document and their attempts to contact me and as of yet have not recieved anything.

What is the best route to go down to resolve this situation ?
Thanks in advance

Hi Santa1983

Thank you for your post. I’m sorry to hear that you’re having problems with getting this sorted out.

When you default on any credit agreement such as a payday loan a business has a duty to report this information accurately to the credit reference agencies.

If the business are refusing to give you the information you’ve requested then you can make a subject access request you can read more about this here.

If you’re still having trouble and would like to speak to us about this you can email us at [EMAIL="paydayhelp@financial-ombudsman.org.uk"][email protected][/EMAIL]or call us on 0300 123 9 123.

Kind regards,
Sarah

kay159

I sent a complaint to Lending Stream regarding affordability checks on a payday loan
They have responded stating that Experian showed my credit score a 540 (classed as good) and that my income was sufficient to repay a loan of £280
My credit file at the time would have shown multiple payday loans, defaults, ccjs etc ... hardly good
A look at the credit history would have shown that payday loan borrowing was approaching or exceeding my salary hence no money to repay priority debts and a trap into monthly rollovers
I have challenged their decision that they were not irresponsible as I feel that looking at a credit score and salary in isolation was wrong
Could you please outline what the FSOs stance on this would be - what affordability checks does a lender have to do and is a look at the credit score and wage slip sufficient or should they be looking at a full list of credit commitments
I do not understand how a mainstream lender turned down a loan based on the same credit score which is why I arrived at payday loans and had to take out more just to repay interest on others
As such I do not believe the credit score quoted was correct
Many thanks
Andrea

DCFC79

kay159 wrote: »

I sent a complaint to Lending Stream regarding affordability checks on a payday loan
They have responded stating that Experian showed my credit score a 540 (classed as good) and that my income was sufficient to repay a loan of £280
My credit file at the time would have shown multiple payday loans, defaults, ccjs etc ... hardly good
A look at the credit history would have shown that payday loan borrowing was approaching or exceeding my salary hence no money to repay priority debts and a trap into monthly rollovers
I have challenged their decision that they were not irresponsible as I feel that looking at a credit score and salary in isolation was wrong
Could you please outline what the FSOs stance on this would be - what affordability checks does a lender have to do and is a look at the credit score and wage slip sufficient or should they be looking at a full list of credit commitments
I do not understand how a mainstream lender turned down a loan based on the same credit score which is why I arrived at payday loans and had to take out more just to repay interest on others
As such I do not believe the credit score quoted was correct
Many thanks
Andrea

Well I don't know how they managed to see the credit score as lenders don't see them, so aren't taken into account for financial matters.

On the other side of the coin others might say its irresponsible borrowing.

kay159

Many thanks for that. Whilst I appreciate it was my own silly fault in some respects for taking out the loans they were only ever intended as short term solutions but life intervened and I ended up taking loans to pay interest on loans
I have complaints in with 6 companies all for similar issues with around 15 rollovers on each - all but one are now settled in full
I heard back from THL today that they will not uphold my claim as their checks were not under FSA guidelines back in 2010 and my salary and loan amounts met their criteria for lending - nothing about any credit checks or looking at my credit history or other borrowing or priority expenses
As such I paid 1275 interest back on a 280 loan. I actually feel that these companies seek out targets for continued borrowing and do not look at the whole credit file or situation like a mainstream lender would
I feel that I was fobbed off and the company is justifying irresponsible lending because they saw one wage slip and looked at nothing else
As for Lending Stream I just wanted someone to confirm the credit score was something they had pulled out of thin air, as I suspected, or was something they had made up under their own criteria. I have now lodged a complaint with FSO regarding THL and am awaiting replies from the others before going down the same route
My question is what does the FSO term irresponsible lending these days so I am clear in what evidence I present and how I word the complaints
Thanks

kay159

For clarification can I ask when a payday loan is taken out is this recorded on a credit file and would the rollovers also be recorded on there
In addition would such a lender be able to see any other loans, defaults and markers of ccjs etc showing against the credit file.
It seems a payday loan company uses only a percentage of the wage slip provided as loan amount and that does not take into account any existing borrowing - or am I well off the mark there
Just trying to work out how 6 companies loaned 133% of my salary between them yet not one company saw any alarm bells ringing or stepped in at any point until I was forced to default to force plans to repay in installments

DCFC79

Yes other lenders do see defaults you have.

I'm struggling to wonder why you didn't stop yourself before you applied for all these loans.

Did you not wonder how long you would be paying these off or how much it will need to pay them off ?