Complaints about payday loan middlemen have more than doubled

Google+ Pinterest LinkedIn Tumblr +

Complaints about payday loan middlemen – so-called credit broking websites – have more than doubled in the last year, according to new figures.

The Financial Ombudsman Service (FOS) said it had been contacted by more than 10,000 people since January this year.

In the worst cases, consumers found hundreds of pounds ‘drained’ from their bank accounts by the websites.

The credit brokers have previously insisted that most customers are happy with their services.

Nevertheless, one debt charity is now calling for the up-front fees they charge to be banned.

The credit broking sites are designed to help people find the best value loan for their needs.

However, according to the FOS, many consumers are unaware that they are using a broker, rather than a loan company itself.

As a result, they readily enter their bank account details.

But instead of receiving a payday loan, they are charged broking, or membership fees, of up to £100.

Banking details are often passed on to other websites, meaning that some people have been charged multiple times.

One woman was charged £70 by ten different sites, losing £700 in the process.

The debt charity StepChange wants to see the practice of charging membership fees in advance made illegal.

“This is a well-known problem, but it continues to get worse,” said Peter Tutton, the head of policy at StepChange.

In a separate report, the ombudsman also said that it was investigating 794 consumer complaints about payday lending in the 2013-14 financial year, up 46% compared with the previous 12 months. A total of 660 complaints were resolved, with almost two thirds upheld.

Wonga, the biggest payday lender, received the most complaints with 237 in 2013-14, followed by Casheuronet, which owns brands including Quick Quid and Pounds to Pocket, with 50.


About Author

Comments are closed.

x Logo: Shield
This Site Is Protected By