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Payday Lenders Still Falling Short...


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News From Credit Strategy

 

Payday lenders “failing” on credit checks

 

Payday lenders are failing to carry out credit checks on all borrowers, a report from the Citizens Advice Bureau (CAB) has found.

 

Cases were discovered in which a payday lender asked people to share their internet banking details, so the lender could directly access their account and adjust funds without advance permission from the borrower.

 

The charity helped one woman who was asked to share her online bank details when taking out a £180 payday loan. Her lender went on to add additional loans into her account every time her balance dropped below £50, or to take a loan repayment when the account had more funds

 

The above case shows that PDL firms are still failing. The firm, who is believed to be "Safety Net Credit TA/ Indigo Michael"

The FCAs rules have helped but more must be done.

 

 

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**Fko-Filee**

Receptaculum Ignis

 

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That doesn't really make sense, that is the whole point of a Safety Net Credit loan, it's pretty clear on their website how it works? They're not like normal payday loans.

 

I'm not a fan at all of how it works, but you know, at some point people really need to be accountable for their own actions

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  • 2 weeks later...

Well spotted! I think payday loans are a useful product if they are used correctly (cheaper than unauthorized overdraft!) but they are so easy for people to mis-use. These people borrow irresponsibly, can't repay, and make a whole fuss about being charged a lot!

 

Don't get me wrong, I'm not pro-payday loans, and there definitely are some lenders out there who are very unfair, but if people would check the terms and ensure they can meet the repayments before they sign up, a lot of the problems with payday loans would disappear.

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PDL companies along with BAYV should be outlawed full stop.

 

They do nothing other than to prey on the most vulnerable in society, those who are clearly going to default on payments they were never going to be able to maintain.

Who ever heard of someone getting a job at the Jobcentre? The unemployed are sent there as penance for their sins, not to help them find work!

 

 

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I disagree. There are plenty of people who use payday loans responsibly, recognising them as a cheaper alternative to unauthorised overdraft. We only hear about the one who mis-use them and get burned, which is why payday lenders are meant to institute stiff affordability tests and credit checks, to weed them out. Most payday lenders only lend to 5% of the people who apply - I wouldn't call that eager to prey on people who won't be able to repay.

 

True, many people who borrow are unaware of the risks, not on top of their spending, and are just hoping they'll be able to repay rather than fit it into their budget. In that case, financial education should be the key.

 

Why is gambling legal? There are plenty of stories of people who lost everything, and even committed suicide, because of gambling. There's zero benefit to it, people generally lose more than they win. Why are payday loans bashed more than gambling?

 

(again, I'm not pro-payday loans, just not completely against them either - trying to be objective!)

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