Payday borrowers choose not to complain

Posted on August 5th, 2013 | Categories - News

Payday lenders told to clean up their act 150 pxCitizens Advice has revealed 76% of 665 cases it has seen recently could have been passed to the Financial Ombudsman Service (FOS), with many payday lenders allegedly collected repayments unethically.

Examples of poor practice included:

 

  •  Consumers chased for payments on loans they never took out
  • Consumers “pestered” by phone calls and texts, despite having a repayment plan in place
  • Possible fraud
  • Consumers suffering from financial hardship being treated unfairly

Following recent controversy over the tactics employed by some payday lenders, many have now signed up to a new code of conduct in an attempt to improve standards in the industry.

However, Citizens Advice clearly believe more needs to be done and has launched a new, month long campaign, urging payday loan borrowers to complain when they believe they have been unfairly treated.

Gillian Guy, Chief Executive of Citizens Advice, said: “It is good to see that, so far, the OFT investigation into the payday loans industry has led to 14 lenders leaving the market. I hope this is just the start of a shift towards a responsible short-term credit market by ridding it of unscrupulous lenders.”

Guy continued: “Citizens Advice sees people day in day out who have been left in absolutely desperate situations by irresponsible lenders. Saddled with years worth of debts, many people are left feeling completely powerless. Yet consumers do have the power to shape the payday loan industry by making their voice heard. By raising problems with Citizens Advice and complaining to the Financial

Ombudsman customers can get their problems sorted out, like refunds for unauthorised payments, reasonable debt repayment plans or compensation for poor treatment, and can stop similar things happening to other people.” (Source: Citizens Advice)

Complaining about payday lenders

According to experts, many individuals who have been wrongly done by, have no idea the Financial Ombudsman Service could help them and therefore don’t make a claim.

In the event of a complaint, the Financial Ombudsman Service will investigate and if wrongdoing is discovered use their powers to take action against the rogue payday lender in question. This usually involves putting the customer back in the same position as if the wrongdoing never occurred.