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  • FIRST POST
    • Willing2Learn
    • By Willing2Learn 15th May 19, 1:49 AM
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    Willing2Learn
    Payday loan complaints reach five year high
    • #1
    • 15th May 19, 1:49 AM
    Payday loan complaints reach five year high 15th May 19 at 1:49 AM
    Source: https://www.bbc.co.uk/news/business-48268474

    Complaints against payday lenders have soared to a five year high, the industry watchdog has said.

    There were nearly 40,000 new complaints brought last year, up a "startling" 130% on the 17,000 the previous year, the Financial Ombudsman Service said.

    In too many cases people have been left to struggle with debt, it said.

    Short-term lender industry body the Consumer Finance Association (CFA) said most of the complaints dated back a number of years.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

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  • archived user
    • #2
    • 15th May 19, 2:40 AM
    • #2
    • 15th May 19, 2:40 AM
    I think it has more to do with the chancers hoping they can make a claim for compensation.
    • boo_star
    • By boo_star 15th May 19, 2:48 AM
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    boo_star
    • #3
    • 15th May 19, 2:48 AM
    • #3
    • 15th May 19, 2:48 AM
    I think it has more to do with the chancers hoping they can make a claim for compensation.
    Originally posted by Tarambor
    Pretty much.

    People are being told they can get free money again so they're off filling forms en masse as a result.

    Not surprising at all.
    • SnowTiger
    • By SnowTiger 15th May 19, 3:17 AM
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    SnowTiger
    • #4
    • 15th May 19, 3:17 AM
    • #4
    • 15th May 19, 3:17 AM
    Source: https://www.bbc.co.uk/news/business-48268474

    Complaints against payday lenders have soared to a five year high, the industry watchdog has said.

    There were nearly 40,000 new complaints brought last year, up a "startling" 130% on the 17,000 the previous year, the Financial Ombudsman Service said.
    Originally posted by Willing2Learn
    I thought most payday loan companies had shut up shop or gone bust.
    • Willing2Learn
    • By Willing2Learn 15th May 19, 4:44 AM
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    Willing2Learn
    • #5
    • 15th May 19, 4:44 AM
    • #5
    • 15th May 19, 4:44 AM
    It was/is a poor business model. The PayDay Loan companies have reaped what they sowed (in my humble opinion). I definitely don't feel they have been 'hard done by'.
    Last edited by Willing2Learn; 15-05-2019 at 4:47 AM.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • boo_star
    • By boo_star 15th May 19, 4:50 AM
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    boo_star
    • #6
    • 15th May 19, 4:50 AM
    • #6
    • 15th May 19, 4:50 AM
    It was/is a poor business model. The PayDay Loan companies have reaped what they sowed (in my humble opinion). I definitely don't feel they have been 'hard done by'.
    Originally posted by Willing2Learn
    Perhaps not, but it's no reason to applaud the compensation culture rearing it's ugly head again either.
    • Willing2Learn
    • By Willing2Learn 15th May 19, 4:54 AM
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    Willing2Learn
    • #7
    • 15th May 19, 4:54 AM
    • #7
    • 15th May 19, 4:54 AM
    True - The compensation culture sucks big time...
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • Turtle87
    • By Turtle87 15th May 19, 8:18 AM
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    Turtle87
    • #8
    • 15th May 19, 8:18 AM
    • #8
    • 15th May 19, 8:18 AM
    If only they were responsible lenders in the first place
    • boo_star
    • By boo_star 15th May 19, 8:26 AM
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    boo_star
    • #9
    • 15th May 19, 8:26 AM
    • #9
    • 15th May 19, 8:26 AM
    If only they were responsible lenders in the first place
    Originally posted by Turtle87
    They're arguably no less responsible than mainstream "prime" lenders.

    None of the credit cards from high street banks that I've taken out over the years required me to prove my income, something which is apparently unacceptable only if you're a PDL company.
    • Willing2Learn
    • By Willing2Learn 15th May 19, 8:33 AM
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    Willing2Learn
    None of the credit cards from high street banks that I've taken out over the years required me to prove my income, something which is apparently unacceptable only if you're a PDL company.
    Originally posted by boo_star
    I think tough affordability and income checks should be required by PDL companies, given their target market. How can they justify giving repeated loans to folks who are not employed for example?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • Turtle87
    • By Turtle87 15th May 19, 8:42 AM
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    Turtle87
    Having dealt with them myself, I know first hand they don’t have the standards of the traditional lenders I.e. the banks. They are sharks.

    Yes people will chance it with affordability claims when they had 1 or 2 loans but for people with genuine claims who were lent multiple loans one after the other (often with an increasing loan amount), it was irresposible of the lenders not to check why this was happening.
    • boo_star
    • By boo_star 15th May 19, 8:44 AM
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    boo_star
    I think tough affordability and income checks should be required by PDL companies, given their target market. How can they justify giving repeated loans to folks who are not employed for example?
    Originally posted by Willing2Learn
    But why are prime lenders being given a free pass in this regard?

    FWIW I do think that PDLs should be checking affordability but frankly ALL lenders should be and for some reason nobody seems to bat an eyelid at banks and other mainstream lenders handing out fairly large sums of money based on what people tell them they're earning whereas PDLs get crucified for doing the exact same thing.
    • Turtle87
    • By Turtle87 15th May 19, 8:55 AM
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    Turtle87
    Presumably because the pay day lenders rip you off and the amount paid in interest is EXTREMLEY high in comparison.
    • boo_star
    • By boo_star 15th May 19, 8:59 AM
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    boo_star
    Presumably because the pay day lenders rip you off and the amount paid in interest is EXTREMLEY high in comparison.
    Originally posted by Turtle87
    That's it?

    So lending money to people who can't afford it is fine as long as you only charge 10% APR?
    • Turtle87
    • By Turtle87 15th May 19, 9:16 AM
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    Turtle87
    They aren’t given a free pass. If you look online at the ombudsman decisions, you’ll see many other complaints about mainstream lenders.

    My point is, often people have paid thousands of pounds in interest for payday loans so these take priority as the redress can be a large amount.

    Also, banks would typically of refused loans to people as they have more stringent affordability checks. This is why people took payday loans...
    • Nasqueron
    • By Nasqueron 15th May 19, 9:24 AM
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    Nasqueron
    The high rates are only an issue with longer loans and roll overs - if you imagine 3650% interest, per day - 10%, for a loan of 2-3 days for £500 for example, it's not a huge amount of interest. Pay day loans can certainly be a problem but the alternative reality for a lot of poor people is loan sharks who will harm people for not paying back, which is better - regulated and responsible (if properly enforced) pay day loans or Big Vinnie who'll break your finger?
    • boo_star
    • By boo_star 15th May 19, 9:33 AM
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    boo_star
    Also, banks would typically of refused loans to people as they have more stringent affordability checks. This is why people took payday loans...
    Originally posted by Turtle87
    But a banks "affordability check" is usually going to be based on average spending based upon income rather than the customers actual I&E which is better, but only marginally so than PDL's.

    And the point I was discussing was that "PDL's are lending to people who are unemployed" and the argument that there should be stringent "income checks" before they lend. Most banks don't ask for proof of income either and can easily end up lending to someone who is unemployed as they will usually take what people write down on application forms at face value rather than asking for proof. This practice is absolutely given a free pass by regulators and by people on here and seemingly by you too, simply because their interest rates aren't silly, which is ludicrous IMO.
    • Turtle87
    • By Turtle87 15th May 19, 10:01 AM
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    Turtle87
    Most banks don't ask for proof of income either and can easily end up lending to someone who is unemployed as they will usually take what people write down on application forms at face value rather than asking for proof. This practice is absolutely given a free pass by regulators and by people on here and seemingly by you too, simply because their interest rates aren't silly, which is ludicrous IMO.
    Originally posted by boo_star
    As I said, if you look online at the ombudsman decisions, complaints are often upheld against the traditional lenders too. If whoever lent irresponsibly, they should rightly be pulled up on it. There's just a huge focus on pay day loan claims at the moment because often the redress can be large for a relativity small loan amounts due to the interest amounts being so high.
    Last edited by Turtle87; 15-05-2019 at 11:33 AM.
    • Willing2Learn
    • By Willing2Learn 15th May 19, 11:06 AM
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    Willing2Learn
    The high rates are only an issue with longer loans and roll overs - if you imagine 3650% interest, per day - 10%, for a loan of 2-3 days for £500 for example, it's not a huge amount of interest. Pay day loans can certainly be a problem but the alternative reality for a lot of poor people is loan sharks who will harm people for not paying back, which is better - regulated and responsible (if properly enforced) pay day loans or Big Vinnie who'll break your finger?
    Originally posted by Nasqueron
    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.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • Clive Woody
    • By Clive Woody 15th May 19, 11:45 AM
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    Clive Woody
    If only they were responsible lenders in the first place
    Originally posted by Turtle87
    There are plenty of "responsible" lenders that people could pick, unfortunately they are reluctant to lend to irresponsible borrowers (people who are unlikely/unable to pay back what they borrowed).

    With the decline in Payday type lenders it's going to become increasingly hard for this type of borrower to find someone who will lend them money (at any rate).
    "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
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