Mental Health and Payday Loans

cccrazy

I recently read on the site that if payday loan companies have not taken into account your personal circumstances, specifically your mental health in this case, you may be entitled to a refund.

I have had countless payday loans with sunny that started off as one then snowballed to four and eventually trapped me in this cycle for years. I suffer from Bordeline Personality Disorder which grately effects my rational thinking and disrupts my life considerably.

However I have only ever missed one payment with sunny. My question is:
A) will mental health be a sufficient reason to be entitled to a refund
having never missed a payment, will sunny consider this as me being able to manage the loans and therefore not be entitled to a refund.

Any help would be great

TrickyDicky101

Did you tell Sunny about your mental health issues either before your first loan or subsequently?

cccrazy

I have never told them about my mental health problems. I was never asked during my application process so I never thought to mention it.

System

cccrazy wrote: »

I have never told them about my mental health problems. I was never asked during my application process so I never thought to mention it.

So given they've not got a crystal ball, can't read minds and don't have access to your medical records then how were they supposed to know? Compensation/Refunds on these grounds tends to be more to do with doorstep lenders, companies like Shopacheck and Provident, and those who send sales people out to sign people up to loans who see the applicant face to face and can therefore pick up on obvious issues.

Merely having mental health issues on its own will not be sufficient reason. The only thing you can do is put an application in and see what comes back. They may write off some or all of the interest as goodwill.

cccrazy

I appreciate what you are saying but doesn't this fall under the category of 'The lender did not sufficiently check your finances or personal situation to make sure you'd be in a position to pay back the loan. Here you can take such factors into account as your age, mental health, employment status, income, expenditure, proof of identity or financial history.'

Whilst I have paid my loans back I have increasingly had to take out more loans to stay afloat. Without the additional loans I wouldn't have been able to pay them back or survive month to month.

cccrazy

It seems from that quote from moneysavingexpert that the blame lies with the company for not asking which I took from the article specifically for payday loans

Yellow_mango

Can you imagine the uproar if loan companies asked about your mental health before approving loans? How would they verify any answers?

You say that without the loans you would have been unable to survive month to month. So would you really have given an answer knowing it would have resulted in you being refused? How many complaints would there be of “unfair” refusals on grounds of intrusive questions about mental health?

This just seems entirely unworkable to me.

System

Your success is likely to come from the repeat loans, not from having a mental health issue. You've been repaying them so as far as the lender is concerned they've not seen any affordability issues with the initial loan and they're not required to do as much due diligence with future loans.

AnotherJoe

cccrazy wrote: »

I appreciate what you are saying but doesn't this fall under the category of 'The lender did not sufficiently check your finances or personal situation to make sure you'd be in a position to pay back the loan. Here you can take such factors into account as your age, mental health, employment status, income, expenditure, proof of identity or financial history.'

Whilst I have paid my loans back I have increasingly had to take out more loans to stay afloat. Without the additional loans I wouldn't have been able to pay them back or survive month to month.

Are you complaining they enabled you to survive?

Had they asked you about your MH and you'd told them you had BPD, and they'd refused your loan, would you then be complaining that because of that discriminatory behavior (especially given you'd always paid back on time), you fell into dire straits?

Exodi

The fellow posters above me have actually highlighted similar views of the FOS. A case study posted by the Financial Ombudsman (FOS):

https://www.financial-ombudsman.org.uk/publications/ombudsman-news/138/138-case-studies-mental-health-debt.html wrote:

Like other health difficulties, discussing mental health difficulties may be very upsetting. And unfortunately - as our case studies highlight - this can mean that people don't disclose that they're having trouble until they're experiencing very serious financial difficulties.

Some people who contact us feel that their debt should be written off - for example, because the business in question should have realised they were struggling, or shouldn't have lent them money at all because of their mental health problems. We often have to explain that businesses can't simply refuse to deal with anyone who's experienced mental health difficulties. But we'll look carefully into the individual circumstances to decide whether - and if so, when - the business could have realised that their customer was struggling.

They actually have a great deal of cases below if you follow the quoted link of the scenarios and outcomes. You'll actually find that the majority of the time the FOS intervenes is entirely unrelated to mental health but due to other checks. The times they do make a favourable judgement for the debtor are in occasions the debtor had informed the creditor of their health issues.

FOS wrote:

We explained to Mr N that lenders can't refuse to lend to people purely on the basis that they've experienced poor mental health. In our view, the lender had clearly explained the second loan. And because Mr N hadn't told the lender about his mental health problems, we didn't think it was reasonable to expect the lender to anticipate the difficulties he might have.

EDIT: that case study page actually makes for an interesting read. The cheek of some people though!

elsien

Having a mental health diagnosis isn't a get out of jail free card and does not neccessarily mean that you lack capacity around your finances.
If there was a time when you were very unwell/possibly in hospital then there may be some redress for that specific issue. You would need evidence to back up your assertion that you were too unwell to know what you were doing at the time, and capacity can't be assessed retrospectively.

However if your financial decision making is so poor on a regular basis, have you considered a power of attorney to manage your finances for you at the times when you can't do so for yourself.