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ndf9876

boo_star wrote: »

And if the OP had told the truth the lender may have declined the application without even needing to go as far as a credit check. Although I guess we'll never know what might have happened.

Agreed - but for various reasons, a lot of the time this didn't happen - not just for the OP - and whilst the borrower must take responsibility for the information they supply (and the debt they incur), the lender must also act responsibly under the FCA rules : https://www.handbook.fca.org.uk/handbook/CONC/5/?view=chapter

And this is the rub of it - as much as OP shouldn't have misrepresented his figures (as you say it is a bit much to lie and then blame someone else, I agree wholeheartedly), the payday lender had a duty to lend responsibly. That's why in this case (and many other cases where the complainant has a long history of payday loans) the first few loans are disregarded. After 6 months of continuous borrowing, I don't think it's unreasonable to assume the lender would (given the nature of the product) dig a little deeper.

boo_star

ndf9876 wrote: »

Agreed - but for various reasons, a lot of the time this didn't happen - not just for the OP - and whilst the borrower must take responsibility for the information they supply (and the debt they incur), the lender must also act responsibly under the FCA rules : https://www.handbook.fca.org.uk/handbook/CONC/5/?view=chapter

And this is the rub of it - as much as OP shouldn't have misrepresented his figures (as you say it is a bit much to lie and then blame someone else, I agree wholeheartedly), the payday lender had a duty to lend responsibly. That's why in this case (and many other cases where the complainant has a long history of payday loans) the first few loans are disregarded. After 6 months of continuous borrowing, I don't think it's unreasonable to assume the lender would (given the nature of the product) dig a little deeper.

I'm not suggesting that the PDL Co's couldn't or shouldn't have done more to determine the OPs financial situation but I'm of the opinion that "Let he who is without sin cast the first stone." Not least because the OP stands to lose a lot in this scenario, the PDL Co's not so much...

Les79

boo_star wrote: »

Are banks any different here? They certainly aren't all that proactive when it comes to applications. Outside of a mortgage application I don't ever remember a bank asking me for payslips or bank statements when applying for credit.

I was referring to undertaking fraud checks when the customer submits an "irresponsible lending" complaint, in the hopes of finding some discrepancies and being able to make an example of them through the courts.

Not undertaking enhanced checks prior to application.

Why hasn't it been done?

If there are a few cases of people (like OP) getting locked up then I would presume that the number of "irresponsible lending" complaints would fall dramatically

MEM62

Willing2Learn wrote: »

I don't know what the 8% interest represents and don't know when it is calculated from either.

Statutory Interest.

iarniee

MEM62 wrote: »

Statutory Interest.

But when is this calculated from?

ndf9876

iarniee wrote: »

But when is this calculated from?

The date the interest was added or charged. So (for example) if you paid interest of £100 on 1st January 2018, you would get 8% for that year (8 quid) and then 8% on that £100 until the date of the decision (the 8% is typically simple, not compound). If that decision were today, I reckon another £4.20-odd. Hopefully that makes sense!

Obviously this is more significant for older loans where more interest was paid.

boo_star

Les79 wrote: »

I was referring to undertaking fraud checks when the customer submits an "irresponsible lending" complaint, in the hopes of finding some discrepancies and being able to make an example of them through the courts.

Not undertaking enhanced checks prior to application.

Why hasn't it been done?

If there are a few cases of people (like OP) getting locked up then I would presume that the number of "irresponsible lending" complaints would fall dramatically

You know full well that companies don't do things like that.

You're being completely disingenuous if you're suggesting that corporations would do that sort of thing.

They look at costs and (usually) decide that it's more costly to fight it than not and decide not to do it. That isn't a win for the consumer, it's a pragmatic decision by an accountant.

Les79

boo_star wrote: »

You know full well that companies don't do things like that.

You're being completely disingenuous if you're suggesting that corporations would do that sort of thing.

They look at costs and (usually) decide that it's more costly to fight it than not and decide not to do it. That isn't a win for the consumer, it's a pragmatic decision by an accountant.

I'm very very surprised that you aren't outraged about the fact that:

- The payday lenders adopt a "pragmatic decision by an accountant" approach which leads to users like OP from getting away with fraud.

Why is that? I would have thought you'd be petitioning for payday lenders to take MORE action towards fraudsters?


Though I'm somewhat sceptical about it merely being an accounting issue for two broad reasons:

1. It would be relatively straightforward to establish the fraud here. Just ask the customer (OP) to send in their bank statements/wage slips and voila, incorrect figures found!

2. Getting even just one or two convictions (and making them public) would set a precedent for many other "irresponsible lending" complaints, and make it much easier to beat them/discourage some from being sent in.

glennstar

Les79 wrote: »

I'm very very surprised that you aren't outraged about the fact that:

- The payday lenders adopt a "pragmatic decision by an accountant" approach which leads to users like OP from getting away with fraud.

Why is that? I would have thought you'd be petitioning for payday lenders to take MORE action towards fraudsters?


Though I'm somewhat sceptical about it merely being an accounting issue for two broad reasons:

1. It would be relatively straightforward to establish the fraud here. Just ask the customer (OP) to send in their bank statements/wage slips and voila, incorrect figures found!

2. Getting even just one or two convictions (and making them public) would set a precedent for many other "irresponsible lending" complaints, and make it much easier to beat them/discourage some from being sent in.

It is incumbent on any financial institution regulated by the FCA to report fraud of any kind to the police immediately it is discovered. This also applies to accountants, solicitors and the like. If you attempt to do this, as I have on many occasions, you are generally met with;
1. The average copper you might encounter behind the desk of a police station who has no idea what you are talking about and is far too busy to do anything about crimes like this... plus they lack the mental aptitude to comprehend what's actually going on in most cases like this... or
2. Reporting this type of crime to Action Fraud will result in a very nice, overworked, copper going through the motions because they have an unparalleled amount of work on, mostly dealing with;
a. scam emails about your computer being compromised and videos of you visiting !!!!!! sites being emailed to your contacts list,
b. unsuspecting folks taking calls from what they think is their bank asking them to make an emergency funds transfer to another account to stop something happening to their money,
c. dealing with cases where fraudsters have gained access to someones computer be pretending to be BT or some other mainstream broadband provider wanting to help improve the speed of their broadband.

Honestly, most financial institutions know what's going on, they just don't have a mechanism to deal with it effectively... which means that no one should take this to mean that somehow the fraudster is in the right.

With regard doing proper checks... I would love to know to what these proper checks are that everyone keeps on talking about. There's quite a lot of if the Lender should have done proper checks this wouldn't have happened going on. What are these checks you refer to?

glennstar

Les79 wrote: »

Fair enough! You make some valid points about the police side of things, however I do wonder whether specific cases could be "pushed through" with some elbow grease.

However, the ultimate arena, so to speak, for battles between Lenders V Borrowers is the Financial Ombudsman Service.

Presumably they are impartial and would listen to instances where consumers have committed fraud? That would similarly squash many "irresponsible lending" complaints by setting a defence framework and a precedent if fraud can be established.

Yes and no. The FOS does not deal with criminal law as far as I know. I suspect they would be loath to conflate things. Also, shocking as it sounds, the FOS, FCA and CMA (also had their fingers in the payday loans pie in the last 5 years) do not actually understand how the payday universe works.

Les79 wrote: »

Well, I've gone through my understanding of it but broadly I think it refers to loans which *could have* slipped through the net.

Examples:

1. Rolling over loans, where it is effectively like paying the full amount off and IMMEDIATELY taking out a new one. The first question is did they run any credit checks etc (particularly given it was *technically* just the initial loan)? The second question is did they not think that a tad suspicious?

Yes, all of this is wrong. I was under the impression this was stopped by the FCA circa 2012, wasn't it? If so it must be beyond statute and out of scope of the current set of claims. With reference to "did they not think that a tad suspicious?", it's hard to say. One of the biggest issues payday lenders have/had is judging the punter's breakpoint. PDLs will only lend a limited amount to punters the first time they borrow money. If the punter pays back the level is increased. The issue the PDL has is judging when not to let the level increase any more as there is always a breakpoint after which the punter defaults. Some (shock) will pay back religiously to push that value up as far as possible, just to default and make off with as much as they can... likely in the queue now asking for compensation.

Les79 wrote: »

2. Being given a sort of "line of credit" of, say, £1000 and then being left to run wild with it. 5x £200 loans in a short space of time? No problem! You got approved on the £1000 so happy days! It is SIMILAR to how credit cards work, I'll give you that, but given they typically packaged them as separate "loans" I think there's a reasonable expectation that checks were carried out on ALL OF THEM. Did this happen? Unlikely.... I've had 5+ loans with one company once and my credit report is very clear in showing that they didn't check my credit very much at all!

Yes, checks would have been carried out on all of them. Notwithstanding my statement above, I think it is worth trying to drill down on what these checks are. The FCA requires that anyone lending money to a consumer checks the creditworthiness of the punter and carry out an affordability check each time an agreement is entered into. There are a wide variety of mechanisms by which these checks take place. The use of multiple CRAs helps build a picture. The problem is that these databases are not updated in real time (Lending Metrics is but it is not universally used so the PDL still has exposure) and even if they were they wouldn't help with changes in circumstance (lots of people take payday loans when they have just lost their jobs, for example - shock). So if you have taken 2 or 3 payday loans from different companies within 30-40 days of each other, there is little or no chance of any of them knowing about the others.... because the CRAs only update their records on a monthly basis. So yes, they will have carried out checks... and yes, it's very easy to have one over on these guys if you really want to...

Les79 wrote: »

They are also immoral pure and simple, but that's akin to me having a moan about the bookmakers who took my money so readily in the past. I have no fight with the bookies because it was fair game. Just like I don't have a fight with MOST payday lenders I dealt with. Only the ones who fit the above two categories.

I won't disagree. I guess the situation is the same as any similar process, how do you sort the legitimate complainants from the scammers. My problem is, I guess, that if someone says I'm making a claim because of irresponsible lending and, by the way, I mislead the lender about stuff, then I think this is both wrong and making the situation worse for the legitimate complainants.

As a side question, if there wasn't a payday market in the UK at the time you were borrowing money, gaming, etc, what would you have done? My feeling is that you would have resorted to another financial mechanism... or even crime?

Les79 wrote: »

I actually appreciate your point of view, to be honest, but the problem is that I've been there. I've been in the shitter and it isn't as simple as having a pop at people who have used PDLs, or those who have claimed money back, nor even those who have committed such low-level fraud (IF THEY PAY IT BACK; I've known some right wrong'uns in respect to that). The FOS is really backing up people like OP and myself, and if nothing else you do have to appreciate that fact and try to understand the reasons *why*.

I suspect we aren't poles apart either, although I can't concur on the FOS. I think it may be more politically motivated than doing the right thing for the consumer. I don't know where to start on my list of suggestions about how the FCA, ICO and CMA could improve the situation for everybody concerned... I'm not sure the MSE servers have enough disk space for it.