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Income payment agreements
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Chair, Martin Lewis · Editor, Marcus Herbert
Replies
Remember that when they lent you £3.5K they did so expecting you to pay back £10K over time; that's their business model.
Have you stopped paying on that yet?
Not sure if anyone else has personal experience of them?
Yes I have stopped paying on that, and they are now saying they are charging default interest, all the other creditors have now defaulted so I'm totally happy to put a DMP in place for them listing the Everyday Loans one as disputed and apply for breathing space so they can't apply further charges to my account while I wait to hear back from the ombudsman.
Stepchange did say that they have a fair bit of experience with Everyday Loans and that they do tend to be obstinate. I think that due to substance problems at the time I would possibly be classed as vulnerable for the purposes of lending, Everyday Loans always say "we were never aware" etc, but I'm pretty sure my statements that they looked at showed excessive purchases of alcohol on them, given their client group they should be asking these questions as much as we debtors should be telling them about them.
Complaint about Everyday Lending Limited trading as Everyday Loans
I’m getting in touch to let you know that I have completed my investigation of *********’s
complaint and I now have an answer for you. This assessment is based on the evidence
that’s been provided so far, however, if there’s any further information you want me to
review, the please send this to me by 16th September 2022.
From what I’ve seen you provided ********** with an unsecured personal loan of £3500 in
November 2021. According to the agreement, the loan was scheduled to be repaid in
instalments of £210.44 over a period of 48 months. The loan was still outstanding as of July
2022.
Having reviewed all the evidence that’s been submitted in this case, I don’t think the loan
should have been issued to ********. I’ll now explain why I think this is the case and what
I think you should do to put things right.
What we think about when looking at complaints about unaffordable or irresponsible
lending
You provided ******* with a high-interest loan, and you needed to make sure that you
didn’t provide it irresponsibly. In practice, what this means is that you needed to carry out
proportionate checks to be able to understand whether any lending was sustainable for ********** before providing it.
What I think this means for this case
From reviewing the evidence that’s been submitted, you carried out some checks on ********* financial circumstances before you approved the loan to him. You asked ******** to submit his recent bank statements whilst you carried out a check on his credit file
through the reference agency Experian. You also used data from the ONS to calculate *********’s total monthly expenditure. Considering all this, along with the term and cost of the
loan, I think your checks were proportionate enough on this occasion.
The results of your checks showed that *********’s monthly income was £1590.17 and his
monthly rent payments were £650 as reflected on his bank statements. Meanwhile, you
calculated *********’s total monthly expenditure to be £513.28 based on data received
from the ONS. And while *******’s bank statements showed no gambling or adverse
transaction activity, they did show he was heavily into his overdraft, only being brought out
by his wages and then going back into his overdraft shortly afterwards.
The results from the Experian credit check showed ******** had no adverse information
recorded on his credit file when he applied for his loan. The results also showed he had five
credit cards outstanding at the time. As two of these credit cards were to be consolidated by
the loan, ********’s repayments towards his remaining credit cards reduced to £179.19 a
month. This means that ************ would have been left with a disposable income of £37.26
each month after his loan repayments had been deducted.
I think your loan wasn’t affordable for him,
and that you acted irresponsibly in approving this loan to him given what you knew about his
circumstances at the time.
What should you do to put things right?
In this case, I think it’s fair that ********* should only have to repay the money he borrowed
and had the use of. Therefore, I think you should refund all of the interest and charges ********** has paid on the loan.
While I think it’s fair that *********’s credit file is an accurate reflection of his financial
history, I don’t think it’s fair that he should be disadvantaged by your decision to lend
irresponsibly. Therefore, under the circumstances, I think you should also remove any
negative information recorded on ********* credit file.
† HM Revenue & Customs requires you to take off tax from this interest. You must give ********** a certificate showing how much tax it’s taken off if he asks for one.
Next steps
I think this is a fair outcome in the circumstances, for the reasons I’ve explained. Please let
me know by 16 September 2022 whether you agree to my recommendations so the case
can be resolved.
But if you don’t accept what I’ve said – and want an Ombudsman to make a final decision on
the complaint – you must provide any further evidence or representations by
16 September 2022. Requests for more time must also be made by that date. If I don’t hear
from you by 16 September 2022 I’ll arrange for an Ombudsman to determine the complaint.