Pay Day Loan Advice Please

W&R

My son, a young adult, has got into a mess with pay day loans (again). After doing some research on here, and following a link to the Debt Camel site, I helped him to write a letter to the bank, asking them to stop the recurring visa transactions going to three different loan companies. The bank then phoned him and said they could do one but not the other two. I then phoned them and they said they could do it but he needed to contact them himself (yes, I did get a bit cross because he had already made the request but he wasn't with me when I made the call as that department are only open 9-5, when we are both working in different locations). So we both finished work early on Friday to go in to the bank in person. We were told categorically that they don't stop payments to pay day loan companies and there is nothing he can do about it. The next payment is due to go out on 18th June and he does not have sufficient funds. So they will also charge him for the failed transaction.

This seems to contradict the advice on here and the information on the FCA website. Where do we go from here?

He also needs to contact the loan companies and set up an affordable payment plan - how best to do that please?

We then intend to make a complaint about irresponsible lending, but need to sort out the current mess first.

Can anyone advise please?

EssexHebridean

Close his current bank account and open a new basic bank account with a totally different provider, would be my suggestion. That'll stop the payment alright.

The next step for him is perhaps for the two of you to sit down together and work out a sensible, viable budget that he can live by. You say he's done this before - how did he go about paying back what he owed then? Above all, and I can't stress this enough - DO NOT GIVE HIM ANY MONEY TO PAY THESE DEBTS OFF - give him practical support, yes, but don't bail him out - there is only one way you learn about mistakes like this, trust me.

Somebody else will be along shortly with a bit more specific knowledge on the PDL sector and what your rights are.

W&R

He has been bailed out twice in the past (by me and his Grandad). This time he is paying it back himself, no more bail outs, but he can't afford the scheduled payments.
We did think closing the account might be the best idea. But I thought banks were obliged to stop recurring visa transactions if you asked them to do so?
Thank you

EssexHebridean

Yes, I had a feeling that might have been what had happened. Fair enough - steep learning curve, but you've learned it now by the sound of it. Hold firm to your decision to not hand over any further cash, make sure any other family members he might approach stick to the same line otherwise this pattern will just keep repeating as there is no incentive for him to stop.

Those recurring card payments are a nightmare to stop - which is exactly why the PDL companies like them so much.

sourcrates

There is a 100% guaranteed way to stop the payment, (just report the debt card lost/stolen on the 24hr number on the back of the card).

They will cancel the card immediately, and no transactions will be allowed.

Do that straight way.

He will get a new card, with a new number, the payday loan people will not have that new number, so will not be able to debt the account.


The CPA does not transfer between cards, each is unique to an individual card number, so cancel the card, and you also cancel the CPA.

Then you can negotiate repayment plans with them from a more positive position.

National_Debtline

Hi W&R


Cancelling a bank card does not guarantee that a continuous payment authority (CPA) for a payday loan will stop. However you are quite right that a bank is obliged to cancel the CPA on request, as per the FCA information you have seen. Unfortunately some bank staff are not aware of this.


You can call the bank, or go into branch again, and refer them to the FCA information. If they still refuse to cancel it ask to speak to a manager. You may also want to consider making a formal complaint, which you can escalate to the Financial Ombudsman Service (www.fos.org.uk) if necessary.


Other options are to cancel the CPA directly with the payday loan lender, or as EssexHebridean suggests, close the bank account. Good luck with it all.


Susie
@natdebtline

W&R

The bank employee did suggest we could try cancelling the card. Worth a try I suppose as at least it might make things a bit trickier for them to take a payment. I have written another letter stating the FCA position and making the request again, which we will drop in later - if we can find a letter box (it's difficult to get to them in person as we work some distance away when they are open). The problem with phone calls is that the department we have been told to speak to (visa disputes) is also only open 9-5 and we are nowhere near each other. He will phone them but is not as confident as me/just accepted it when they said it wasn't possible. They don't make it easy. I'll ask him to phone again tomorrow (which will probably take all of his 30 minute break!).


I will be making a complaint in any case, as the person we spoke to on Friday was downright rude ("we don't deal with anything to do with gambling", which is not my sons problem, for the record, and was not mentioned by either of us and "you'll get debt collectors on your doorstep" just two of the choice quotes).


Thank you for your replies. I will let you know how we get on tomorrow.

sourcrates

Not wanting to disagree with susie@national Debtline, but once the card is cancelled, no further transactions can be made using that particular card, it is a defence against fraud, you try buying anything online and enter just one digit of your card number incorrectly, instant decline, the same principles apply here.

Although technically the CPA still stands, the instrument to use that authority is no longer valid, so they cannot debt your account, ask the payday loan company concerned, they will confirm its correct.

I used the same tactic myself before going insolvent in 2007, the technology has not changed since then.

z1a

sourcrates wrote: »

There is a 100% guaranteed way to stop the payment, (just report the debt card lost/stolen on the 24hr number on the back of the card).

They will cancel the card immediately, and no transactions will be allowed.

Do that straight way.

He will get a new card, with a new number, the payday loan people will not have that new number, so will not be able to debt the account.


The CPA does not transfer between cards, each is unique to an individual card number, so cancel the card, and you also cancel the CPA.

Then you can negotiate repayment plans with them from a more positive position.

And where would he get that number from if he's saying he no longer has the card?

sourcrates

z1a wrote: »

And where would he get that number from if he's saying he no longer has the card?

Banks website will clearly display emergency numbers for lost and stolen cards.

EssexHebridean

sourcrates wrote: »

Banks website will clearly display emergency numbers for lost and stolen cards.

It's also on the back of the card usually, I think, although might be best to forget that's where he got it from if they ask! :rotfl: