Were you caught in a Pay Day Loan Trap ? - You may be able to make a claim

Pay Day loans offered access to quick and easy cash on a short-term high-cost basis

Their main selling point, which was highly attractive, was they guaranteed money quickly making it ideal for emergency situations

Prior to 2nd January 2015, payday loan companies did not have to cap their interest rates with some charging as much as 7000% interest

Payday lenders as do all other lenders, have a duty of care towards their customers meaning they must carry out effective checks to confirm that the loan they are offering is affordable

This means checking borrowers’ financial background and clearly explaining any fees or charges that will incur

Many payday loan companies were not effectively carrying out these checks meaning some of their customers were building up huge amounts of unmanageable debt

The Financial Conduct Authority (FCA) kept their promise to investigate Pay Day Lending. They have introduced new regulations in respect of Lending Criteria and have placed a Cap on the interest that PDLs are allowed to charge. They have also forced Lenders to look at the loans they have already provided and to make refunds where borrowers were Treated Unfairly, provided loans and rollover loans when it was obvious the borrower was not in a position to repay.

The Companies were supposed to make contact with the borrower, whether they were still repaying - defaulted or had repaid their loans. It is suspected that not everyone will have been contacted. So, do you Qualify for a refund or compensation ?

You may be able to claim if...

Your payday lender did not make any fees or charges you would incur clear to you

You had to repeatedly roll-over a loan. This shows that you could not afford to take out the initial loan in the first place as you couldn’t make the payments

Did you have to borrow from another payday lender in order to pay off your initial loan

The loan was a large portion of your income meaning you couldn’t pay it in time as you would not have been able to buy food, pay your mortgage or bills etc

It has to be clear that your payday lender did not carry out the proper checks before lending - You could check with the Credit Reference Agencies - if the Company ran a check on your financial situation, there should be a search recorded

The strongest claims emphasise that your payday lender gave you a loan that was not affordable

How to make a payday loan claim

First, gather all the information you can about your payday loan

Be sure to include: the date it was taken out, interest and charges that were added, if you rolled over the loan, details of any missed payments, the date you paid it in full or the amount still to pay and finally confirm if the lender ran any credit checks prior to approving your loan

It’s best to get this information from your payday loan provider as you will be sure it is correct - Alternatively, you can send a Subject Access Request. The Lender has 40 calendar days in which to provide this information. You will need to enclose the fee of £10.00 with the request and it is advised you obtain at the very least, a free proof of posting when mailing. You should send your request to the Company's Head/Registered office.

Next, contact your lender to register a complaint on the grounds that the loan you were given was not affordable and request a refund for the charges and fees that were added

Support your claim with any personal information about your situation. For example if you needed to take out a loan from another payday company to pay yours back or if you were in arrears with your bank at the time of lending

Finally if your lender does not offer you any compensation or they do not reply within 8 weeks, take your complaint to the Financial Ombudsman. See their How to Complain guide for further help on how they can help get your payday loan refund

You might also be able to make a claim for compensation if you were Treated Unfairly.

Most Pay Day Lenders use a repayment method called Continuous Payment Authority. This effectively takes control of the repayment out of the hands of the borrower. If you failed to make a payment on time, they would simply keep asking your bank for their payment - this would sometimes leave the borrower with huge charges from their bank or leave them financially embarrassed on other payments, perhaps for their Council Tax, Mortgage/Rent, Utilities, etc.

The Company should give at least 3 days notice that it is going to take money from your account. If they didn't do this, then you should be able to complain.

So you should be able to make a claim for this.

In March 2015, the FCA acknowledged that Lenders were still misleading their customers -

http://www.theguardian.com/uk-news/2015/mar/10/payday-lenders-mislead-threaten-customers-fca-report

"Misleading and occasionally threatening” correspondence from lenders, some of which was sent to vulnerable customers. One firm sent customers text messages threatening visits to their home or workplace.

 

At every firm reviewed the FCA identified failings in systems and processes that had resulted in errors such as account balances being miscalculated, fees or charges that the lender was not entitled to charge being added to customers’ accounts, customers being pursued for wrong amounts, and payments being taken at the wrong times.

 

Backlogs of correspondence, including from vulnerable customers who had fallen behind with their payments. This included medical evidence and letters from debt advisers providing crucial information about why some customers had not paid what they owed.

 

The FCA said that where non-compliance was uncovered, it had intervened quickly to ensure firms took specific steps to ensure the failings were not repeated in future. “In some cases, investigations are on-going, and the regulator is working with firms to determine appropriate levels of redress for those affected,”

Many thanks to tawnyowl for his huge input to this thread.

In view of any success gained from following the advice provided above...and you consider our advice was useful in attaining that successful outcome ....please consider making a donation to assist CAG to continue to help others....every donation made helps CAG to continue to help others.

Please start your own thread and let us know how you progress with your claim.

http://www.consumeractiongroup.co.uk/forum/showthread.php?455693-Pay-Day-Loan-Companies-Contact-Information

If you wish to make a complaint - you will find contact information on the thread linked above.