Is Your Payday Loan Provider Legal?

Is Your Payday Loan Provider Legal?

Getting a loan from traditional lenders like banks is not easy. This is one of the main reasons people prefer payday loans. Banks require collateral. You also need a good credit score. If you don’t have collateral and a good credit score, you need a guarantor to co-sign the loan agreement. Considering guarantors are hard to come by, it’s understandable why many people turn to payday loans today.

You don’t need security or a good credit score to secure a payday loan. It also takes less time and effort to get a payday loan. You can apply for the loan online and receive the loan amount in a few minutes. The benefits of payday loans are obvious. However, not all payday lenders are good. So, how do you determine if you are working with an authorised lender?

Scarce lender information

Most illegal internet payday loan providers in the UK have one thing in common i.e. they offer scarce information about themselves online. If you can’t get concrete information about a lender on their site, be cautious. All online UK payday loan providers must adhere to the same rules followed by their storefront counterparts. It’s not advisable to deal with any company online, let alone a payday lender, that doesn’t offer adequate information online.

Online payday loan lenders are required by law to provide their Company number as well as their FCA authorisation number. Most unauthorised lenders don’t provide such information. In fact, recent statistics from European Union investigations indicate that only one out five online payday loan companies in the UK provide basic lender information as required by the law. Unauthorised lenders who are only interested in making quick money and exiting the market have no business following legal channels. The lenders make it impossible to check their authorisations or credentials.

No infrastructure investment

It’s also worth noting that illegal lenders have no interest investing in infrastructure. For this reason, most illegal payday loan lenders don’t have a working call-center, physical address/permanent office, and staff. In a nutshell, you can’t visit or get into contact with the company in person if you want. The lender may have contact details that don’t work. All online companies can be traced to a physical address or location because they are started by individuals. Illegal lenders are untraceable because they have very little to no infrastructure investment on purpose.

Missing APRs

You should also be wary of payday loan sites that don’t highlight the representative APRs. The representative APR is arguably the most important lender information in any payday loan website since it highlights how much a borrower is expected to pay in interest. Any lender who doesn’t disclose this information isn’t transparent and will most likely end up overcharging you.

Expired information

Payday lenders also need to have up-to-date information for them to be considered legal. It doesn’t matter if a lender has interim permission or is fully authorised. The lender you are dealing with must have updated information. You can conduct a quick search on the FCA’s website http://fca-consumer-credit-interim.force.com/CS_RegisterSearchPageNew to ascertain this.

Inaccurate information

The information presented on the FCA’s website must also match with the information presented on the lender’s website. Most fraudulent payday loan providers pose as legitimate lenders. It’s, therefore, important to ascertain if the payday loan provider you are dealing with is a registered lender or broker.

Summary

To secure a payday loan, you have to submit sensitive personal information (such as your name and bank account) to your lender. For this reason among many others, you can’t afford to deal with a fraudulent provider. Luckily, there are many signs to look out for when you want to identify fraudulent providers. One, most fraudulent payday loan providers offer scarce information on their website. If you can’t get adequate information about the payday loan provider, their terms and conditions, interest charges etc., think twice. You should also beware of payday loan providers who don’t have any infrastructure investment. The validity and accuracy of information is also important. Expired and/or inaccurate information is a sure sign of trouble. All in all, you must do your research and understand the risks of dealing with online payday lenders.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

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