For a payday loan complaint to be launched, there must be some form of wrongdoing. With that said, you need to know your rights as a payday loan borrower. Complaints should be launched when you have a problem with a lender or when you have been mistreated.
Although payday loans are great for emergency cash needs, it’s easy for borrowers to be trapped in downwards spirals of debt. Payday loans are high-cost short-term loans which can easily get out of control when they are not paid within a month. In fact, most of the complaints the Financial Ombudsman Service (FOS) receives about payday loans revolve around cost.
There are also complaints about unfair lending terms. Some lenders have also been accused of coercing their clients to repay the loans. The latest statistics indicate that the Financial Ombudsman Service received 7,375 payday loan related complaints between April and September 2016. The FOS has been receiving about 7,000 payday related complaints per year indicating a sharp increase.
This is despite the regulatory controls put in place by the FCA. The FCA has also been cracking down irresponsible lenders in the UK. Nevertheless, payday borrowers continue to suffer. There are still many irresponsible payday loan lenders operating in the UK. So, how do you proceed if you fall victim to an irresponsible lender?
Many payday loan borrowers are aware of their rights now more than ever because of the recent focus on rogue lenders. Here’s a quick guide to launching a payday loan complaint.
When should you launch a complaint?
You should launch a payday loan complaint when; you start having problems affording your loans. For instance, if you struggle to afford a payday loan which appeared affordable initially, you have a right to launch an official complaint. Payday loan lenders are bound by law to give payday loans only to those people who can afford them. It’s also within your right to complain if your lender takes out payments unexpectedly from your account. Borrowers can also complain if they are harassed to make repayments. There are many other cases where you are entitled to complain. For instance, if you feel the lender didn’t adhere to the FCA interest and fees cap, you can also launch a formal complaint.
Write a complaint letter to your payday loan lender.
To launch a payday loan complaint to the Financial Ombudsman Service, you have to inform your lender first in writing. You can also use online complaint tools like resolver.co.uk. On receiving your formal complaint, your lender has eight weeks to respond to your complaint. If they don’t respond or take appropriate or satisfactory action to resolve the issue, you are free to escalate the issue to the FOS.
The FOS has legal mandate to assess and provide independent decisions on payday loan complaints in the UK. You can reach the FOS by phone (0300 1239 123 or via its specialised page for payday loan complaints: http://financial-ombudsman.org.uk/keeps-you-awake/index.html)
The FOS offers payday loan complainants FREE services.
The FOS is at liberty to decide if you are eligible for compensation based on the nature of your payday loan complaint. Compensation can come in many forms i.e. more time to clear your loan if you have been treated unfairly. The FOS can also recommend monetary compensation if you have been overcharged.
To avoid being a victim of rogue payday loan lenders, it’s important to borrow from reputable payday loan providers only like SwiftMoney. Reputable providers don’t overcharge their clients or subject them to unfair terms.
It’s also important to familiarise yourself with the rules. The FCA website has all the information you need to know about payday loan price caps. The website also has information on how payday loan lenders are supposed to conduct themselves.
The FOS website also has all the information you need about launching complaints. http://financial-ombudsman.org.uk/keeps-you-awake/index.html
It’s also advisable to seek financial help if you have financial trouble. Over reliance on payday loans every month is a sure sign that you need financial help. There are many free debt services in the UK you can talk to like stepchange.org, citizensadvice.org.uk and nationaldebtline.org.