Payday Loan Brokers Cause Concern

Posted on August 19th, 2014 by Toni Burns

The Financial Ombudsman Service has reported more than ten thousand complaints against credit brokering payday loan websites since the start of the year.

The ombudsman said earlier today that the total number of similar cases registered for the whole of last year was less than half that number.

Credit broking sites are supposed to team up the applicant with the lender to produce the best possible result in order to meet the customer’s requirements.

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However, some of these companies are charging the customer hidden fees that may well be disguised under another term such as membership, arrangement, set-up fees or likewise.

The object of these companies should be to make the process as quick and easy as possible for the proposed borrower, but unfortunately, there are rogue sites that are not giving enough care to the customer. Unfortunately, the publicity against these sites tends to tarnish the whole short term loan industry, therefore the rest of them will probably be tarred with the same brush.

Click4profit director Paul Williams, owners of Smart Loans who are one such company who act as a credit broker between lender and applicant has stated in the past that most of their applicants seem to have been very happy with the service provided.

Mr Williams had also added that if any of their customers were dissatisfied, then their company would be willing to offer them a refund as the alternative.

It appears that many of the problems consisted of applicants not being able to identify who had taken the charge, apparently because companies tend to trade under different names.

Another common denominator consisted of customers’ personal bank account details being passed on to other companies that led to consumers paying fees more than once.

In the worst circumstance, a woman was charged £70 multiple times which was automatically debited from her bank account without any permission whatsoever.

The FOS also said that around 65 per cent of complaints that they had already looked into on behalf of the consumers had stood up and they were within their rights to have made the complaint.

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Juliana Francis at the FOS commented: “It’s disappointing that people who are already struggling to make ends meet are being misled into thinking that these websites will get them a loan. Too many of the cases we sort out no loan is provided, and people’s bank accounts have been charged a high fee, often multiple times.”

But the senior ombudsman is convinced that their service can solve the issues efficiently by adding, “If money has been taken from your account unfairly or without warning, the good news is the ombudsman is here to help. Give us a call and we can put things right quickly.”

Consumer Finance Association chief executive Russell Hamblin-Boone, speaking on behalf of payday lenders, sympathises with the customers who have experienced problems.

Mr Hamblin-Boone wants brokers to state clearly on their sites that they are not lenders. He explains: “The problems caused by some brokers and lead generators bring the whole market into disrepute not least because it is hard for most customers to tell the difference between lenders and these middlemen.”

The CFA representative went on to suggest that any person seeking a short term loan should make sure the site they are using is operating legally.

Cash Sorted advise that customers check out the company to see if they possess an interim permission number that is authorised and regulated by the Financial Conduct Authority.

You can verify their permission license number at the Public Consumer Credit Register to feel more secure should you decide to use their services. Caluferdire .

About the author

Toni Burns Toni Burns is a Digital Marketing Specialist at Cash Sorted and writes the majority of our informative blog posts. She keeps on top of the finance industry and reports back on any changes that could affect our users. Toni loves skiing, eating out & listening to music.

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