The decision to take out a payday loan can be motivated by a wide range of factors, but is most commonly driven by the need to cover an emergency or temporary shortfall in wages. Payday loans are generally easy to apply for and receive, and pay out between £100 to £1000, with high APR and charges making them practical for lenders to issue. While it is possible to use payday loans without going into significant debt, there can be cases where you may need to complain about a loan agreement, and have to take certain steps to do so.
Some of the more common areas for complaint when it comes to payday loans can include using a lender that hasn’t properly disclosed all of their fees or terms and conditions. Extra charges for ‘rolling over’ a loan by taking out a new payday loan to pay for an old debt can be combined with aggressive tactics for reclaiming money. While this applies to a relatively small amount of payday lending cases, mistakes can happen, and complaints need to be made.
To reduce the risk of this happening, it’s best to work with a reputable payday loan provider like SwiftMoney that has a customer charter; this can include transparent information about terms and conditions, as well as links to organisations like the Consumer Credit Trading Association and other bodies that offer advice on what to do if something does go wrong, and further action needs to be taken over a loan. Reports can similarly be made to the Office of Fair Trading, which can then investigate payday lenders under the Consumer Credit Act of 2006 if they’re proven to have broken the terms of their advertising. A first step that should be taken when complaining about a payday loan is to send a written letter to a provider, which explains where a customer charter was broken, or charges were unfairly issued. You can also complain to the Financial Ombudsman Service, which can handle cases where a payday loan company has broken their charter, or hasn’t held up legal requirements for disclosing terms and conditions. Getting a response from a written complaint to a payday loan company can take up to around two months, while going through the Ombudsman can result in a six month wait unless a lender accepts they were in the wrong.
If you’re having problems with a complaint, you might also want to report a payday loan lender to the British Cheque & Credit Association (BCCA), who can then decide whether it’s worth taking further action against one of its members. This can include a company being struck off, or being fined for not holding up the standards they have agreed to. The negative publicity a complaint can generate can also be very damaging for a payday lender’s reputation.
As with any complaints procedure, always keep detailed records of letters and emails, and download a copy of a lender’s customer charter and print it out to use as evidence. The first step in these procedures should always be, though, to write to a lender to see whether a problem can be resolved; in some cases, mistakes with charges may have been caused by an oversight, and can be resolved without taking legal action.
Again, making sure that you work with a reputable payday loan company like SwiftMoney can help to reduce the hassle of going through a complaints procedure. Comparing the market and ensuring that you’ve taken the time to read through a website’s terms and conditions can also make it much easier to get hold of a loan that’s not going to create financial issues further down the line.