Tactic for dealing with "rollovers"

[vjohn82]

I noticed many people on the forum are struggling with payday loans, particularly when it comes to difficulties in paying the account and then being forced into accepting a "rollover".

 

Rollovers are essentially a temporary measure of delaying payment of the account in exchange for a fee (usually at a higher rate of interest than the initial loan). In exchange for the offer of more time to pay you agree to give consideration to the lender in the form of payment. If you are already struggling with the debt it makes little sense to be getting deeper into the mire.

 

However, I have noticed that some lenders will automatically drop in this "rollover" element even if debtors inform the lender that they are experiencing difficulties.

 

Under the OFT Debt Collection Guidance, the following applies:

 

2.6 Examples of unfair practices are as follows:

 

b. pressurising debtors to sell property, to raise funds by further borrowing or to extend their borrowing

 

You are under no obligation to take out further finance or incur further costs if you are in financial difficulty.

 

f. pressurising debtors to pay in full, in unreasonably large instalments, or to increase payments when they are unable to do so

 

You only have to offer what you can afford to pay.

 

Do not feel intimidated by the payday lenders, they have to abide by the rules like everyone else. They will tread a fine line or completely step over it. Knowledge is power so use it.

[Delboy01]

Interesting point.

[paxon]

Good point but unfortunatly in practice these monkeys dont seem to play by the rules, but i can see what you are saying.

[vjohn82]

Good point but unfortunatly in practice these monkeys dont seem to play by the rules, but i can see what you are saying.

 

Well I know they don't play by the rules, that's why I have offered this post as a way of preventing further charges/borrowing. If you are informed of your rights there is no excuse for the lender to ignore them.

[sillygirl1]

Sadly VJohn82 they claim they are 'outside' the mainstream lending and therefore these 'rules' do not apply to them.

 

If they do try court the following has been successful

 

1. Their POCs are inaccurate and misleading and fatally flawed

2. Because of the continual rollover charges and the 'default fees' they are on dodgy ground.

3. Due to the high interest rates they are charging (one company wanted their 225% rate charged from day of issue of judgement to day of final payment on a recent POC) the judges will generally ask them to amend the POCs or go to mediation

 

Please remember I have been helping in this area for four years now and have never yet seen a lender cave in on the rules you post above.

 

This is a very 'grey' area of legislation, some of the companies are not even able to bring a case in the UK courts because they are based overseas.

[sillygirl1]

Whilst using the OFT guidelines against these companies is a method of regaining power the only sure way is getting an alternative bank account to stop them inappropriately taking funds....

 

Where in current legislation can you stop this from happening VJohn82? There is nothing I have found, the banks say because they have your card details and you owe them money they are entitled to it, the company say their debt is the big priority and they take all your funds, claiming various ludicrous charges (I've seen £500 solicitors referral fee on a £150 loan).

[vjohn82]

Where in current legislation can you stop this from happening VJohn82? There is nothing I have found.

 

You weren't looking hard enough then; the Consumer Protection from Unfair Trading Regulations 2008 is something I have been using to help people for some time now. I can single out each and every single term which applies to this sort of behaviour if you so wish? It's not a grey area of legislation, it's just no-one has used it to its fullest effect yet.

 

In 2004/05/06/07 people started using the Consumer Credit act 1974 to challenge unfair agreements; that's some 30 years after the legislation was introduced. Was it powerful legislation? Yes. Did people use it to the fullest effect in the early years? No. Did lenders ignore the statute? Yes. Are they paying the price for doing so? Yes.

 

All of this adds up to which tactics you are willing to adopt in asserting those rights.

[sillygirl1]

I have mentioned those regulations in some defences but again the companies will only come out with alternative legislation and that will confuse the defendants, they will not be able to argue at short notice that the legislation is incorrectly being quoted.

 

A simple defence allowing the defendant to change their defence if the claimant has to change their POCs is more than sufficient, again based on the flawed POCs and the incredibly high interest rate - the OFT guidelines are just that, guidelines and until they become law there are other ways.

 

Remember with payday loans they are a very short term committment taken under duress from other situations and this is another angle to play on.....

[vjohn82]

I have mentioned those regulations in some defences but again the companies will only come out with alternative legislation and that will confuse the defendants, they will not be able to argue at short notice that the legislation is incorrectly being quoted.

 

What alternative legislation has been quoted in your cases which has allowed a lender to get away with the practice I have challenged in my OP?

 

I agree with you on the OFT guidelines being just that; but the CPUTRs are statute law and there's no hiding from them.