Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Willing2Learn
    • By Willing2Learn 15th May 19, 1:49 AM
    • 3,570Posts
    • 3,172Thanks
    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

Page 2
    • Willing2Learn
    • By Willing2Learn 15th May 19, 12:16 PM
    • 3,570 Posts
    • 3,172 Thanks
    Willing2Learn
    And the same news from another source (slightly different perspectives). Apparently, in some cases the FOS has dealt with customers who held more than 100 payday loans at one time!!! Talk about irresponsible lending!


    Source : https://www.theguardian.com/money/2019/may/15/payday-lenders-face-sharp-criticism-as-complaints-rise-130

    The finance industry’s adjudicator has criticised the “unacceptable” behaviour of some payday lenders after a 130% rise in complaints, which it said goes beyond the practices of recently collapsed industry leader Wonga.

    The Financial Ombudsman Service (FOS) said the surge contributed to a 14% rise in complaints across the financial sector, which reached a five-year high of 388,392 over the 12 months to March.

    The rise in payday lending complaints more than offset a drop in PPI complaints, which accounted for fewer than half of new disputes for the first time in a decade, as the August deadline for claims looms.

    Payday loans accounted for 39,715 of the new disputes, marking a 130% rise from a year earlier. The FOS annual report called it a “startling” rise and said the conduct in this sector “has been unacceptable”.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • Candyapple
    • By Candyapple 15th May 19, 12:26 PM
    • 3,301 Posts
    • 2,778 Thanks
    Candyapple
    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
    • Turtle87
    • By Turtle87 15th May 19, 1:00 PM
    • 38 Posts
    • 10 Thanks
    Turtle87
    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
    • kelevraz
    • By kelevraz 15th May 19, 1:27 PM
    • 189 Posts
    • 53 Thanks
    kelevraz
    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
    • Nasqueron
    • By Nasqueron 15th May 19, 1:32 PM
    • 7,603 Posts
    • 4,836 Thanks
    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.
    Originally posted by Willing2Learn

    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
    • Willing2Learn
    • By Willing2Learn 15th May 19, 1:46 PM
    • 3,570 Posts
    • 3,172 Thanks
    Willing2Learn
    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
    Originally posted by Nasqueron
    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.

    I love my job

    • kelevraz
    • By kelevraz 15th May 19, 1:48 PM
    • 189 Posts
    • 53 Thanks
    kelevraz

    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.
    Originally posted by Candyapple
    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 Woody
    • By Clive Woody 15th May 19, 4:30 PM
    • 4,741 Posts
    • 5,327 Thanks
    Clive Woody
    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)
    Originally posted by Willing2Learn
    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
    • keepcalmandstayoutofdebt
    • By keepcalmandstayoutofdebt 15th May 19, 6:28 PM
    • 3,657 Posts
    • 1,928 Thanks
    keepcalmandstayoutofdebt
    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

    Claims Management companies ? like this -
    "Why you should pay us" ......
    People would be nuts to use 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. 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...
    RIP my Rags. 16/06/19 at 4am
    Know I had to moneysave but you didn't have to go
    x
    • Bermonia
    • By Bermonia 15th May 19, 8:59 PM
    • 701 Posts
    • 543 Thanks
    Bermonia
    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.
    • Turtle87
    • By Turtle87 15th May 19, 9:14 PM
    • 38 Posts
    • 10 Thanks
    Turtle87
    Just remember this is the standard these pay day lenders operate at:

    https://www.bbc.com/news/business-47629809
    • parking_question_chap
    • By parking_question_chap 15th May 19, 10:18 PM
    • 2,282 Posts
    • 2,566 Thanks
    parking_question_chap
    If only they were responsible lenders in the first place
    Originally posted by Turtle87
    Or perhaps if their customers were responsible spenders and lived within their means in the first place, they wouldnt have needed a payday loan.


    I appreciate thats not all people and some are hard up through no fault of their own. But so many people are all about the spend spend for the latest products. Then try and work out how they can pay for it later.
    • Turtle87
    • By Turtle87 15th May 19, 10:36 PM
    • 38 Posts
    • 10 Thanks
    Turtle87
    In some cases this will no doubt be true BUT it’s a generalisation. Cases are circumstantial why people took out multiple loans however, this doesn’t mean the lender can lend irresponsibly.

    My understanding of upheld affordability claims is mostly cases where multiple loans were taken out one after the other over a long period of time, not the odd loan here and there. When this happened the lenders failed to make the NECESSARY checks.
    • Bermonia
    • By Bermonia 16th May 19, 6:05 AM
    • 701 Posts
    • 543 Thanks
    Bermonia
    Turtle87 - so you are unhappy with a generalisation of people who use payday loans but are more than happy with the generalisation of payday lenders?

    Keep in mind payday lenders are required to make ‘proportionate’ checks, given the turnaround time usually required for payday loans it would be impractical to request evidence of someone’s income and expenditure purely because people do not want to provide true and accurate information as part of their application.

    Whilst I fully accept some practices could be better, people have to take responsibility for their actions - after all they are surely best placed to consider their circumstances before applying.
    • Turtle87
    • By Turtle87 16th May 19, 7:46 AM
    • 38 Posts
    • 10 Thanks
    Turtle87
    Correct. Based on there being millions of individuals who take out payday loans and only approx 50 payday lenders in the UK.

    I don’t know why anyone in their right mind would support these rip off practises. They barely existed 10 years ago and people survived. Now you can’t watch the TV without seeing them being advertised.

    I agree that people have to take responsibility for their actions but what has been happening is payday lenders funding people to live off these loans one after the other over a long period of time without any questions being asked.

    In these cases, rightly so you should get the interest paid back. As I’m sure you’re aware, often in these cases the interest paid on the first 2/3 loans is not refunded as the proportionate checks were made by the lender. Just nothing was done after these.
    • kelevraz
    • By kelevraz 16th May 19, 8:33 AM
    • 189 Posts
    • 53 Thanks
    kelevraz

    I don’t know why anyone in their right mind would support these rip off practises. They barely existed 10 years ago and people survived. Now you can’t watch the TV without seeing them being advertised.
    Originally posted by Turtle87
    Actually, people just went to normal loan sharks.

    The difference being that a loan shark would then show up to your house and intimidate you / get violent with you. There's always been a 'market' for people who cant get 'normal' loans.


    I agree that people have to take responsibility for their actions but what has been happening is payday lenders funding people to live off these loans one after the other over a long period of time without any questions being asked.

    In these cases, rightly so you should get the interest paid back. As I’m sure you’re aware, often in these cases the interest paid on the first 2/3 loans is not refunded as the proportionate checks were made by the lender. Just nothing was done after these.
    Originally posted by Turtle87
    As ive said before, i don't support them, but their demonisation only gives people the impression that THEY are the victims, how so? You, of your own free will, sign up, and take a loan thats too expensive, and then when you cant pay it back, its somehow the lenders fault?

    When you say they have been 'funding' people, i think you need to be clear about the fact that people CHOOSE to go back to them, i don't remember ever hearing of a single case where a pay day lender has just 'put' money in your account and then forced you to pay it back with a stupid interest rate, have you?
    • Turtle87
    • By Turtle87 16th May 19, 9:01 AM
    • 38 Posts
    • 10 Thanks
    Turtle87
    So illegal loan sharks set a precedent? Wake up.

    Approx x10 people use pay day lenders (2 mill) in comparison to illegal loan sharks (190k).

    Yes it is the lenders fault in these cases I’m talking about (repeat lending and increasing loan amounts over a long period of time). This is EXACTLY why they are being instructed to refund the interest by the FOS. The loan was not affordable. It's pretty simple to understand.

    As someone who has dealt with pay day lenders and "experienced" the way they operate, I know exactly what they’re like. They are sharks in suits. How many times have you had loans from them? Let me take a guess....0?
    Last edited by Turtle87; 16-05-2019 at 9:06 AM.
    • Nasqueron
    • By Nasqueron 16th May 19, 9:08 AM
    • 7,603 Posts
    • 4,836 Thanks
    Nasqueron
    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)
    Originally posted by Willing2Learn

    Yes I agree, hence the issue with something like the FCA making sure they follow the rules with suitable fines. I think the recent cap (proposal? law?) on maximum borrowing amount is sensible.
    • kelevraz
    • By kelevraz 16th May 19, 12:38 PM
    • 189 Posts
    • 53 Thanks
    kelevraz
    So illegal loan sharks set a precedent? Wake up.

    Approx x10 people use pay day lenders (2 mill) in comparison to illegal loan sharks (190k).

    Yes it is the lenders fault in these cases I’m talking about (repeat lending and increasing loan amounts over a long period of time). This is EXACTLY why they are being instructed to refund the interest by the FOS. The loan was not affordable. It's pretty simple to understand.

    As someone who has dealt with pay day lenders and "experienced" the way they operate, I know exactly what they’re like. They are sharks in suits. How many times have you had loans from them? Let me take a guess....0?
    Originally posted by Turtle87
    I've had in excess of 30 payday loans in my time.. All between the ages of 18-20.. nearly half of the loans i took i actually got while i was unemployed

    a PDL got through to me about 6 years ago and offered me a refund of around £400 or so, saying they had basically 'done the maths' and figured out that i had overpaid on past loans, of course i accepted it, but i never applied for it, didn't even realise at the time how big the whole cracking down on PDL was going to become.

    W***a emailed me literally a couple of weeks ago, advising me that i 'may have a claim' (hence my post up there), haven't bothered responding to it as frankly i just don't care lol

    So, as someone who has dealt with pay day lender and "experienced" the way they operate first hand (As you say), i can comfortably and with no reservation say, that i was always well aware of what i was doing, i was always well aware that the rates were absolutely exorbitant, there were times i took loans KNOWING i'd have a problem paying them back (but thats a problem for future me to worry about...)

    No one ever forced my hand in taking one. And clearly, unlike some... i'm not and have never been in the habit of trying to convince people that don't have a grip on their finances, that it's the PDL fault that they made things worse for themselves. Ever heard of the expression borrowing from peter to pay paul??

    To caveat that, what would i have done without PDL? No idea, in reality - my credit file would've taken a beating much SOONER than it did. The fact i (And other people) lived/live way outside of my means was always going to end in tears, as someone above mentioned, all it did was delay the fact i'd have to eventually face up to it.
  • archived user
    I don’t know why anyone in their right mind would support these rip off practises. They barely existed 10 years ago and people survived.
    Originally posted by Turtle87
    People used Shopacheck and Provident doorstep sub-prime lenders who had been on the go for decades, both of whom had infinitely more shady practices than most payday lenders especially when it came to top ups. As the internet wasn't as widely used by people back then they got away with it.

    Sub-prime payday loan type lenders have existed for donkeys years, the only difference is today they're now on the internet.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

162Posts Today

2,390Users online

Martin's Twitter
  • A brilliant and gripping profile of Boris Johnson by the great @JPonpolitics well worth the 15 minute read https://t.co/odelHYEbRg

  • Boris Johnson is now going to be our prime minister. Worth a pause for thought, whatever your political persuasion.

  • Boy they're dragging out this #conservativeleadership announcement.Three introducers now each grabbing air time. Get on with it please!

  • Follow Martin