Payday loans - payments off cards

[Millbrookblue]

Been speaking to my bank re some issues I have with Money Shop ( aka CTP or cash till payday) &

 

they told me some interesting things about payday loan companies generally .

 

Key points are :-

 

1. They scan your card and record your 3 digits on the reverse when you sign up .

2. This means they can take payments in lieu of cheques , even including charges that you may be disputing with them ,

& sometimes even if you have changed card the bank will still honour the payments.

3. Even if you change cards (and therefore the three digits) they can try to take payments from data on the strip - and my bank says it does pay out on this !

4. You can change bank accounts - but my bank says they are still obliged to pay out to registered financial institutions if you have given out your details ,

and effectively the payday loan co gets paid , so you then have your old bank chasing you for payment to them .

5. Payday loan companies can and do try to recoup debts by putting through a series of small payments

as many banks will honour these even if it puts the customer overdrawn by a small amount

6. Payday loan companies record your payday - and try to recoup all the money on payday !

 

As I say , this was all gleaned from talking to my bank but it sounded true .

 

I will soon find out about some of the points above but my advice is simple

- avoid payday loans like the plague !

[dx100uk]

sadly 90% WRONG!!

 

We have been telling people to put a letter into their bank instructing them not to make any payments under any circumstances to these companie

http://whatconsumer.co.uk/visa-debit-chargeback/s - it works!

 

banks MUST follow written intructions from their customers !

This fsa guide has now been updated:

 

http://www.fsa.gov.uk/pubs/consumer_...ghts_guide.pdf

 

Here's the text:

 

Cancelling a regular

card payment:

 

When you give your credit or debit card

details to a company and authorise

them to take regular payments from

your account, such as for a gym

membership or magazine subscription,

it is known as a ‘recurring transaction’

or ‘continuous payment authority’.

These are often confused with direct

debits, but do not offer the same

guarantee if the amount or date of the

payment changes.

In most cases, regular payments can

be cancelled by telling the company

taking the payments. However, you

have the right to cancel them directly

with your bank or card issuer by telling

it that you have stopped permission for

the payments. Your bank or card issuer

must then stop them – it has no right to

insist that you agree this first with the

company taking the payments.

Be aware, though, that you will still be

responsible for paying any money that

you owe.

see: http://www.consumeractiongroup.co.uk/forum/showthread.php?336569-How-to-remove-a-lender-s-continuous-payment-authority(2-Viewing)-nbsp

dx

[maybelline]

the money shop and NON DATED CHEQUES????

 

does the bank honour these if you write and tell them not to do so?

[Millbrookblue]

Thanks dx100uk . So basically my bank has given me duff info , and may allow payments they shouldn't ? I'll follow your advice and write to them . maybelline - money shop have told me they will date and cash cheques , charge £25 for each returned cheque , then try and take the cheque amount + charges from your bank account via debit card , and if unnsuccesful will try to do so again immediately after midnight each day - hoping that one day is payday and they can sweep out all your wages . My bank appears to be saying they may well pay them ! Dependent on what bank you are with you can cancel cheques (you should have a receipt for them) by cheque number often for free . But of course , if your bank is the same as mine you may not be out of the wood yet ! Looks like we both need to follow dx100uk advice.

[maybelline]

thanks to both - the consumer rights regs are so complicated despite the efforts to make it clear to consumers since for every step taken the 'moneygrabbers' such as money shop who prey on the vulnerable will find another way to take extortionate charges and fees.

 

good luck.