The Financial Ombudsman has revealed that despite the fact that new controls have been implemented, the volume of complaints regarding payday loan companies rose by 178{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} in the 12 months to March.

There were 3,216 complaints about short-term loans in 2015/16, compared to 1,157 the previous year.

Nevertheless, the Payment Protection Insurance (PPI) saga continues to be the most complained-about financial product.

There were a staggering 188,712 complaints about PPI in the last 12 months, an 8{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} reduction on a year earlier.

Complaints about packaged bank accounts – where customers pay a fee, but enjoy benefits like travel insurance – more than doubled to 44,244.

Claims management companies, rather than individuals, were responsible for filing most of them.

Control Measures

The principal complaints regarding payday lenders were:

  • lenders not carrying out affordability checks
  • providers unwilling to agree on repayment plans
  • use of continuous payment authorities, which allow lenders to take money from your account
  • debt-chasing tactics

Controls (new) on payday lenders were brought in by the Financial Conduct Authority (FCA) in January 2015.

After that date, interest charges were capped at 0.8{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} per day of the amount that was borrowed.

Stricter affordability checks were brought in a year before that, in 2014.

As a result of the new controls, and bad publicity, many payday lenders left the market.

Source BBC Business News

T H Financial Recovery work with both individuals and businesses in financial difficulty.  If your business is facing problems and you need advice on the options available, such as new funding, business restructuring or help with insolvency, we can help.

Give us a call to arrange a FREE, no obligation consultation.  We handle both informal and formal insolvency work, including:

Business Assessment and Restructuring, New Funding Options, Creditor negotiation and time to pay arrangements, Company and Individual Voluntary Arrangements (CVAs & IVAs), Administration, Liquidation, Bankruptcy.

Give us a call to arrange a FREE, no obligation consultation.  Tel: 01772 641146