Payday loan victims urged to speak out
Published by Max Salsbury for 24dash.com in Communities and also in Finance
Payday loan victims urged to speak outImage: Money via Shutterstock
The Financial Ombudsman Service has urged people struggling with payday loans to confront the ‘shame factor’ and seek help.
And the ombudsman has warned that though its figures reveal a record number of complaints, that it is likely to be "only the tip of the iceberg".
The ombudsman has revealed that:
- Complaints about payday loans have more than doubled in the last two years.
- In two out of three cases payday lenders were told to put things right.
- The most common cause for complaint was people saying they hadn’t taken out the loan.
- People also raised concerns about poor service and administration, lenders not being willing to help those struggling to repay and aggressive debt collecting practices.
Stella Creasy MP, Shadow Minister for Competition and Consumer Affairs, who has campaigned for years against payday lenders, said: “Today’s news from the Financial Services Ombudsman is confirmation of our status as a nation of silent sufferers. Citizens Advice have stated that three quarters of the cases they see relating to payday lenders could have a case with the watchdog and yet they still only see a few hundred cases a year.
“These legal loan sharks rely on the fact that people will not discuss their debts. I have seen cases where the ombudsman has ruled against lenders for failing to consider the affordability of loans they were giving out. I would encourage anyone who has concerns about a lender to seek advice and make a complaint.”
Sounding a warning to the industry over poor business practices, the ombudsman called on lenders to take a positive approach when tackling customers’ concerns.
It also said that "disappointingly high numbers" of people were unaware that they could speak to the ombudsman if they felt they were not being treated fairly.
Principal ombudsman Caroline Wayman said: "We often hear from people who took out a payday loan as a desperate last resort and blame themselves when the debt starts to spiral out of control. It’s important that people don’t feel trapped with nowhere to turn because of the stigma associated with short-term lending.
"Money problems can affect everyone – but the good news is that there is light at the end of the tunnel. If you have a problem with a payday loan, get in touch with the ombudsman straight away. We’ll contact the lender on your behalf and help to quickly get things sorted."