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Payday loan complaints reach five year high

edited 30 November -1 at 1:00AM in Loans
42 replies 3.2K views
135

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  • CandyappleCandyapple Forumite, Board Guide
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    Payday loans, guarantor loans, car log book loans – the one thing they all have in common is that the people who use them are always in denial of their situations and as a last resort to continue their fading façade of spending more than they earn, they turn to them for help. It’s a shame these lenders exist in the first place as all they are doing is prolonging their customers' misery by not forcing them to face up to reality.

    If you find yourself not being able to pay for a broken washing machine/boiler/car repair or whatever “emergency” situation falls on you, and can’t ask your employer for a temporary advance or family/friends for a small loan or even if you don’t have a credit card that you could put the spend on – it’s time to re-evaluate your life.

    I wonder how many people would be forced to face up to their money problems if these so-called lifelines were not available. Probably millions.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
  • Turtle87Turtle87 Forumite
    38 posts
    Good article;

    Most complained about financial products complaints in the year to March 2019
    1. PPI: 180,507

    2. Current accounts: 41,069

    3. Payday loans: 39,715

    4. Credit cards: 13,940

    5. Motor insurance: 12,977

    6. Mortgages: 10,087

    7. Hire purchase: 8,943

    8. Unsecured loans: 6,806

    9. Buildings insurance: 6,723

    10. Instalment loans: 5,162
  • kelevrazkelevraz Forumite
    192 posts
    Funny thing is, WONGA are actually emailing people who have held loans with them in the past to tell them (essentially) to make a claim against them
  • NasqueronNasqueron Forumite
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    I have used a loan shark several times (over 20 years ago) and I've had a PDL too (over 10 years ago). I found the experience with regard to checking id paperwork etc to be pretty similar. The PDL, in addition, asked for paperwork to prove income. They both allow debts to roll over in a very irresponsible way.


    That's why I said that PDL firms that are being properly monitored by someone like the FCA are at least going to be held responsible. The drive to chase them all away is going to end up with people going to loan sharks as there is no other money available
    the concept of a United States of Europe is right.” Winston Churchill 1930
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  • Willing2LearnWilling2Learn Forumite
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    Nasqueron wrote: »
    That's why I said that PDL firms that are being properly monitored by someone like the FCA are at least going to be held responsible. The drive to chase them all away is going to end up with people going to loan sharks as there is no other money available
    Don't get me wrong. There is a definite market for PDLs. It does protect consumers from having to use loan sharks. But the need for PDL companies to properly check income and affordability is so much more necessary than if you or I apply to a high street bank for a loan. That is because PDL companies target particularly vulnerable consumers, whereas high street banks do not. There is a specific need for the PDL income/affordability checks to be so much more thorough than that carried out by high street banks. It is to protect the most vulnerable in society... (imho)
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

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  • kelevrazkelevraz Forumite
    192 posts
    Candyapple wrote: »

    If you find yourself not being able to pay for a broken washing machine/boiler/car repair or whatever “emergency” situation falls on you, and can’t ask your employer for a temporary advance or family/friends for a small loan or even if you don’t have a credit card that you could put the spend on – it’s time to re-evaluate your life.

    I kind of follow this logic. I think people need to learn to be more responsible for their own actions.. the current demonisation of PDL only gives more and more people reassurance that THEY are the victims (as an effect of their own choices). No PDL has ever 'forced' anyone to take a loan

    For the record, im not in favour of PDL, although, again, as many people have said in the past, if you take the loan, and pay it off as you were MEANT TO, then the loan is settled and you move on with life, end of story

    That being said, i do accept that every once in a while, you'll be faced with a financial situation where you simply have no way to get out of, but the flip side to this is, what would you have done if there wasn't a ridiculously high interest loan available to you
  • Clive_WoodyClive_Woody Forumite
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    There is a specific need for the PDL income/affordability checks to be so much more thorough than that carried out by high street banks. It is to protect the most vulnerable in society... (imho)
    Which is great in principle, but when those checks show that the most vulnerable folk cannot afford to repay the loans or have a history of not repaying, where do those people go when the lenders turn them down? More stringent checks will result in less money being handed out.

    While I do not like the PDL industry, it filled a gap in the market and it's business model (crazy high APR) took into account the vast number of accounts that defaulted or were never repaid on time. Shifting them to only lending to folk where there is a better than average chance of them repaying the loan leaves a lot of people with no options for borrowing
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • keepcalmandstayoutofdebtkeepcalmandstayoutofdebt Forumite
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    I think the complaining took a whole new level when W-nga left the scene personally, some of the review sites for these lenders then got utterly out of order, it's like people are in a frenzy.

    For me, there are far bigger sharks out there - that debt collection agency without giving someone any form of pre advance on serving what look's important and nearly last chance papers for what £240 - very good for the printing of 9 pages - only £20 more was would I would have paid one of these lender types a £100 loan with it's interest. ohh you cannot call them for advice or even tell you what sort of payment plan they may entertain so what exactly are they doing for an added £240...... and well when it goes up to £255 I will certainly being wishing I took out a loan to avoid such mess. I can't imagine anyone rocking up to tell me in later years I could have it all refunded.
    I paid more in insurance premium alone last year - you what? I can claim it back, yeah right :cool:

    Claims Management companies ? like this -
    "Why you should pay us" ......
    People would be nuts to use :cool: but I imagine they still do. What then. (I appreciate this site don't endorse this thankfully but you could get into real trouble with the supposed guys helping you) how does this get past the wonderful FCA. It's a tad worse then any or ex. payday loan company's 'little word'.

    It is my belief people who worry about their credit score and who could afford these loans in the first place, are actually those receiving the compo, why can't it all go to charity beyond the relevant small sum given out. :D It will be interesting when people will get caught by their credit card/s taking extra payment thanks to the FCA intended regulations on that as to what the uproar will be then. Because of course poor people can often only afford to make minimum payments...


  • BermoniaBermonia Forumite
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    Irresponsible lending... perhaps at times. Irresponsible borrowing... most defiantly but why should people be held accountable for their own actions?

    Whilst in an ideal world more through checks would be beneficial, it doesn’t suit the core requirement of people needing a QUICK short term loan, also when PDLs do ask for these documents to prove I&E people go out of there way to provide fake documents or hide pages of statements that do not show what they want.

    It is impractical to tarnish all PDLs with the same brush, it would also be irresponsible to simply remove them from the market place as there is clearly a need for their services.
  • Turtle87Turtle87 Forumite
    38 posts
    Just remember this is the standard these pay day lenders operate at:

    https://www.bbc.com/news/business-47629809
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