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Payday lenders in Swindon under attack
THREE quarters of all payday loan borrowers have been treated unfairly and could have grounds for an official complaint, according to the Citizens Advice Bureau.
Practices by high interest short term lenders have come under attack, after a six-month probe into individual cases by the Citizens Advice Bureau showed 76 per cent of people who had taken out one of the loans had been harrassed or exploited by the companies offering them.
Analysis of 665 cases exposed the main reasons for complaint, including fraud, harrassment, continuous payment authorities taking more money than they were owed, and unfair treatment of vulnerable people in financial difficulty.
One in five were possible cases of fraud with customers being chased for loans they had not taken out, and more than 10 per cent of borrowers had been harassed with phone calls and texts rather than working towards a reasonable payment plan.
The bureau is urging people to take up their cases with the Financial Ombudsman Service if they feel they have been mistreated. Between April and June this year there were 160 complaints made to the Financial Ombudsman about payday loans, with 72 per cent being found in favour of the customer.
Claire Newport, chief executive of Swindon Citizens Advice Bureau, said: “We are urging people to stand up to payday lenders who have treated them unfairly by making a complaint.
“People come to the bureau after lenders have taken money from their bank without permission or prior warning or chased them for debts they did not have.
“Consumers often feel powerless against big business but if your complaint is upheld by the Financial Ombudsman you could get money back that was wrongly taken or compensation for poor treatment.”
A payday loan customer from Swindon, who wished to remain anonymous, said: “I had to ask for help because I no longer had any money in my bank account for food. My monthly income was being drained by repayments for the 12 payday loans I had taken out over the last four months to make ends meet.
“By the time my mortgage payments were due in the middle of the month the loan payments had meant I had reached my overdraft limit. My only option at the time was to find another lender who would help bridge the gap.
“I ended up receiving calls from three of the companies as late as 11 o’clock at night with calls being made up to four times a day chasing payment and threatening further action from bailiffs.”
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, which represents the major short-term lenders operating in the UK, said: “One complaint is one too many.
“While we only represent a handful of the 126 lenders that were surveyed, CFA members are the only lenders who have put in place independent monitoring against our Code of Practice, developed to offer further protections for customers, and which exceeds the standards set in the Customer Charter.”
To make a complaint, customers can go to www.adviceguide.org.uk or call the Citizens Advice bureau on 08454 04 05 06.
Alternatively a complaint can be made directly to the Financial Ombudsman Service on 0300 123 9 123.
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