Guest Comment: It's time to review all high-cost loans

Worried.com

Hi these companies get you when your low and desperate. I had loans with some of them and am still counting the cost. There is one company which I had a loan with and when I struggled with repayments they just ended up helping themselves to my bank account and taking 5-600 a month, which I was told by the bank nothing they could do, so I managed to close my account and have yet to have any contact with the company.

sourcrates

Worried.com wrote: »

Hi these companies get you when your low and desperate. I had loans with some of them and am still counting the cost. There is one company which I had a loan with and when I struggled with repayments they just ended up helping themselves to my bank account and taking 5-600 a month, which I was told by the bank nothing they could do, so I managed to close my account and have yet to have any contact with the company.

Oh no, And you let them ?

They can only take money by two methods from your account, continuous payment authority through your debt card, or by direct debt.

Both can be cancelled in seconds, did you not realise this ?

Your bank doesn't know what it's taiklng about, I would complain about this if I were you.

Maria_D

After the break up of my marriage, and finding myself totally responsible for my mortgage and 3 dependent 'children' (2 at uni, 1 at school), with no support from my ex, I turned to pay day loans........naively believing their promise that, it could infact improve my credit file.
Big mistake, and years down the line, despite being paid back quickly, these have caused me more financial hardship.
I'm a professional with a good secure and regular income, unable to get a mortgage. I am therefore paying someone else's......£800 a month 😢. Until these disappear from my credit file, I have little chance of getting a decent mortgage. No one EVER told me that.

jamesd

Worried.com wrote: »

they just ended up helping themselves to my bank account and taking 5-600 a month, which I was told by the bank nothing they could do, so I managed to close my account and have yet to have any contact with the company.

Just when was this? The Payments Services Directive when it took effect in the UK made the bank required by law to honour a request to block such payments and refund any that had been taken after the notice was given. This doesn't erase the debt but you may be able to recover the amount paid between your initial request and the account closure from the bank. If it was recent enough. It took some of the banks a while to actually recognise this and get the systems in place to act properly.

What should have happened is the lender agreeing an affordable repayment schedule with you. Depending on how much you paid and when it's possible that you might be able to recover some of the money taken from the lender. This may be why they are not chasing you: they may realise that it's only going to invite trouble for them. Your chances in this area are considerably better if it was after FCA started being the regulator.

Since the details matter, if you do want to investigate this you might want to start a new topic dedicated to your situation.

No surprise that you might not have known these things or been emotionally capable of doing them at the time, though. That's one of the unfortunate effects of debt and financial troubles sometimes.

jamesd

Maria_D wrote: »

Big mistake, and years down the line, despite being paid back quickly, these have caused me more financial hardship.

Can you say roughly when you took out the loans and roughly when you were first denied a mortgage? I'm asking because one of the relatively recent changes is reporting of such loans on credit reports and you may have suffered as a result of that change combined with the false claim about helping your credit.

If you haven't done much shopping around for a mortgage it may be worth doing that, perhaps with the advice of a mortgage broker. Some lenders will just decline anyone with any trace of short term loan on their credit record but others are more accepting, particularly when it's years in the past and with a good reason like yours. It's an area where brokers may be able to really earn their cost in improvement to your situation.