Pay Day Loans - damage to your future credit rating

[renegadeimp]

I notice how wonga actually avoid the question of 'can taking out a wonga loan affect my credit rating'

 

Same with PDUK. They state 'MAY' not 'WILL', so they cant get into trouble.

[Kitten1]

Dammit!

 

Got lots of emails detailing various spurious charges IF I was to default but have lost the ones with reference to credit files! Must have happened when my email acc changed!

[orfoster]

Surely still misleading given the circumstances of those applying for credit and being declined

[renegadeimp]

Not really misleading technically, when they say MAY or MIGHT. Not will or guarantee.

[Tawnyowl]

Back in 2012.

Misselling based on emails being sent to many people for a time in 2012

Historic,maybe,but how many people took the view these will improve my credit file.

And went for it.

Paid them off perfect.Happy thinking this will now improve my credit rating.

Only to find now,that this really trashed their chance of getting big finance in the future.For mortgages etc.

 

http://www.dailymail.co.uk/news/article-2237712/Wonga-sorry-sending-emails-implying-loans-wonders-peoples-credit-ratings.html

 

Comments.

Sorry for the emails! it was an old email! Is it really relevant if is is an old email. If the information is wrong and misleading now was it ever true?

 

Vulnerable individuals would probably be taken in by them. If the email was not true and was factually incorrect about a Financial product, then sorry isn't enough is it? It is a product missold and the FSA should be involved immediately

 

And they do not admit how many they sent.

In the past or when the mistake happened.Mistake my hat.

Drumming up business.

Why not make the mistake that reads Payday loans will trash your credit file.

Always perhaps works in the lenders favour not the consumers.

 

Most banks will have what they call fatal criteria within their automated credit decision tools.

‘If one of these criteria is triggered, a loan request will be automatically declined. Banks are increasingly including the existence of a payday loan within the fatal criteria.’

Others admitted privately that payday borrowing would count against those applying for loans and mortgages, even years later.

Experian, the UK’s biggest credit reference agency, has begun categorising payday loans separately from other forms of borrowing when issuing credit reports on bank customers.

 

And that was back in 2012.

 

If you ask me Payday loans are the new Lepers of Lending.

I would not touch them with a bargepole,yours not mine.

 

They could and probably will damage your future.

 

I Like that-Lepers of Lending.

Where did that come from.

Are some of you sending telepathic messages to me.

I would not touch them with a bargepole,yours not mine.

 

They could and probably will damage your future.

 

Payday lenders-THE LEPERS OF LENDING.

I may use it more often.

 

Good luck all of you in your quest.

I hope you find what you are looking for.

And somehow teach them a lesson.

The thread is hopefully letting many know about the dangers to their credit file.

And it is nice to see so many people that care about consumers.

Following this very interesting thread closely.

 

 

Edited July 28, 2013 by tawnyowl

[citizenB]

I notice how wonga actually avoid the question of 'can taking out a wonga loan affect my credit rating'

 

Same with PDUK. They state 'MAY' not 'WILL', so they cant get into trouble.

 

Yes, they will say that it was the CRAs that made those statements and not them.

[citizenB]

 

If you ask me Payday loans are the new Lepers of Lending.

I would not touch them with a bargepole,yours not mine.

 

They could and probably will damage your future.

 

 

I Like that-Lepers of Lending.

Where did that come from.

Are some of you sending telepathic messages to me.

I would not touch them with a bargepole,yours not mine.

 

They could and probably will damage your future.

 

Payday lenders-THE LEPERS OF LENDING.

I may use it more often.

 

Nice one, tawnyowl

 

It will more than likely catch on !

[sillygirl1]

Interesting reading on the Wonga link, I particularly was amused at the fact that they only had 49 complaints to the FOS, wonder how many complaints were made to the OFT which is the better known organisation (in a wider sense!).

 

Pick and choose comes to mind when reading the FAQs on that link!

[citizenB]

Here is one Cagger who found that having PDLs on their credit file affected their mortgage application !

 

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?395532-Wonga-on-credit-report-affecting-mortgage-application!

 

Hi all,

 

I'm currently going through the process of buying my first property and have hit a brick wall in the application!

 

I am applying for a mortgage through Aldermore. I have 3 defaults on my account but they were all satisfied over 40 months ago now. I declared these on my initial application which was fine. My LTV is 70% as I have a good deposit. However I've now been advised my application has been referred due to the payday loans I took out almost a year ago.

 

I took out these payday loans with Wonga after seeing on their website getting short loans and paying them back on time can improve your credit rating. Obviously now I know this is not the case.

 

I've just had a very tedious call with Wonga who could only say, they can not do anything about my credit now, and to try with another mortgage company. I asked to speak to a manager and they point blank refused which I thought was terrible customer service. I got the names of the people I spoke to.

 

I'm so annoyed, because at the time I didn't need the loans and not did it to improve my credit. I paid all of them back early and never a big amount.

 

Is there anything I can do? I've heard people have managed to get these removed from there credit report due to wonga saying it will improve your credit score, when in fact it doesn't. I'm panicking ill lose my house due to this.

 

Any help would be great, thanks!

[orfoster]

I think the question needs to be asked in what circumstances exactly "may/could" a PDL improve credit!

[scotgal68]

Martin Lewis take on things

http://blog.moneysavingexpert.com/2011/10/07/can-you-use-payday-loans-to-boost-your-credit-rating/

[Tawnyowl]

When was that written.

Sometime in 2011.

Was this before payday loans were put separately on peoples credit files.

They are now put at one side i am told.

Which seems to put lenders off lending you anything,even if you have paid them off early or on time.

A payday loan,is a signal.Even if it was for a emergency.

You are not worthy.

You will not pass go.

Your mortgage,loan has been referred,declined.

Where are the warnings.

Having a payday loan,will impair future credit applications.

For sure.

For years and years.

 

Reaction from a lender when a customer told them about this.

I've just had a very tedious call with Wonga who could only say, they can not do anything about my credit now, and to try with another mortgage company. I asked to speak to a manager and they point blank refused which I thought was terrible customer service. I got the names of the people I spoke to.

Despite having a big deposit.

 

WHATt you could not write this.It is like a dream,a nightmare.

For many.

I am spitting feathers writing this.I nearly broke my keyboard.

Bad enough the other day when i discovered Wonga were paying for a program to be made for Channel 5

tELEVISION WENT THROUGH THE WINDOW-I just wish i had opened the window first.

Sorry for shouting.

.

Edited July 28, 2013 by tawnyowl

[scotgal68]

Aye I can see it was written in 2011, so it's probably not applicable - I know that having a PDL does have a bearing on leading criteria

[citizenB]

 

WHATt you could not write this.It is like a dream,a nightmare.

For many.

I am spitting feathers writing this.I nearly broke my keyboard.

Bad enough the other day when i discovered Wonga were paying for a program to be made for Channel 5

TELEVISION WENT THROUGH THE WINDOW-I just wish i had opened the window first.

Sorry for shouting.

.

 

 

Yes, I think that might have been a good idea, TO !!

[orfoster]

Ok well I for one took a PDL based on their advice that it "may/could" but really WON'T EVER improve your credit rating!

 

The Martin Lewis link above was correct at the time but now that lenders do treat it differently its out of date.

 

I am willing to lodge a complaint with Wonga (what harm can it do) and see their response and escalate if need be.

 

I wonder about lodging a complaint on the lines of;

 

COMPLAINT

Dear The Lepers of Lending,

 

I write in relation to a number of loans held with Wonga in recent years.

 

You are one of many PayDay Lenders who advise or have advised customers that by taking one of your products this will have a positive impact on their credit report, at no time did you warn me that taking one of your products would or could have a substantial negative impact on the way in which other lenders would view my credit worthiness despite being aware of this fact.

 

Wonga led me to take a financial decision that I would not have otherwise taken based on advertisements and assertions that by taking a short term loan this would have such an impact on my credit file.

 

You will be aware of the Conduct of Business rules laid down by the Financial Conduct Authority which specifically state that "a firm must act honestly, fairly and professionally with the best interests of its client" further the rules state "A firm must ensure that a communication or a financial promotion is fair, clear and not misleading".

 

It is clear that following seeking advice in this matter that having a product from Wonga does not in any way improve credit worthiness given that Credit Reference Agencies differentiate between payday lenders and mainstream lenders. A lender is more likely than not to view a payday loan as a sign of desperation.

 

I applied for my loan on the basis that you suggested that it would improve my credit file. I am frankly shocked that you would treat me in this manner.

 

I now require that you remove all reference of my dealings with you from my credit file as a gesture of goodwill in this matter or that alternatively that you compensate me for misleading me which has caused me to be viewed negatively by other lenders.

 

If you do not agree I look forward to your response including specifically and in detail the circumstances in which a Wonga loan would improve a credit score.

 

I look forward to your response.

 

Just a first draft.....any additions, removals? Thoughts, comments or otherwise?

 

Oli

Edited July 28, 2013 by orfoster

[Tawnyowl]

William Shakespeare,comes to mind.

What a letter.Written with a quill,no doubt.

Precise and to the point.

Wonderful to read.

The first of many i hope.Additions i have not.

I can add no more.

The Lepers of lending will be quivering when they get that.

Such good work.

 

“To defend what you’ve written is a sign that you are alive.”

 

I look forward to their reply.

What harm can it do.I do not know.

But look forward to any forthcoming battles that may hopefully arise

I now sleep ready for the morning,when the battle commences once again..

And will not stop till the war is won.

Against the predators targeting our communities.

Wherever they are from.

 

William F Tawnyowl 2013.In The Tower by the sea.

Where the payday lenders probably want to put me.

Edited July 29, 2013 by tawnyowl

[orfoster]

William Shakespeare,comes to mind.

What a letter.Written with a quill,no doubt.

Precise and to the point.

Wonderful to read.

The first of many i hope.Additions i have not.

I can add no more,but will tom.

The Lepers of lending will be quivering when they get that.

Such good work.

“To defend what you’ve written is a sign that you are alive.”

I look forward to their reply.

 

Thanks.

 

I just need someone to tell me that COBS apply to PDL's. Some of the COB rules talk about investment for example COBS 2.1.1 here http://www.fshandbook.info/FS/html/FCA/COBS/2/1.

 

Am I right to quote it?

[Tawnyowl]

Hi Orfoster.

I am not the brightest about the rules and regulations of COBS.

http://www.consumeractiongroup.co.uk/forum/content.php?849-BCOBS-Round-up-Making-your-bank-treat-you-failry

Seems to be just about banks.

The Consumer Credit Act regulates the payday lenders i believe.

http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/OFT1466.pdf

And maybe we should look at the rules and regulations of the CFA

http://www.cfa-uk.co.uk/our-standards/codes-of-practice.html

Irresponsible Lending comes to mind.

Failure to provide borrowers with adequate explanations prior to a credit agreement being made.

The explanation that taking out this loan will, not may affect your credit file in the future.Not for the better,for the worst.For years.

It s a minefield of info out there.

We must get it right.

Many people must not know the paydayloans they are taking out are affecting their future.

When they find out it is to late.

Time to spread the message far and wide.

We are not lawyers,just people trying to fight back..There is a problem that has been spotted.

Many people it seems are being turned away for credit,probably for some the biggest of their lives due to these toxic loans.Whether paid back early or on time.Whether used for a emergency or not.

The product is affecting their credit files.

The products from the Lepers of Lending.

Simples.Let us try to get something done about it.

We are metamorphosing.That is all

I am sure your question on COBS will be answered today.

Good heavens CitizenB is about this time of day.Just spotted him on the forums.It is the middle of the night.Thought only owls were about this time of day.

Tawny.

Edited July 29, 2013 by tawnyowl

[orfoster]

Hello tawnyowl,

 

See here for the link on COBS http://www.consumeractiongroup.co.uk/forum/content.php?834-Fair-Treatment-for-Credit-Card-Holders-and-Borrowers.

 

I'll have a look at OFT this morning, I do wonder about arguing its against Consumer Protection from Unfair Trading Regulations 2008 but again we have no direct recourse on this piece of legislation it's up to the OFT to enforce so I doubt they'd enforce.....

 

I can't believe you were awake in the early hours.

 

Hopefully someone else will come along and tell us for sure what we would rely on.

 

Oli

[Tawnyowl]

Yes orfoster.Went through that about 4 am this morning..

We will get to the bottom of it.

As with the fairness requirements in BCOBS, the fairness rules contained in the COBS principles are hugely powerful. They are capable of being applied to every conceivable kind of wrong-dealing meted out to you by your bank or lender.

 

The fly in the ointment, however, is that there is no right of direct civil action in the courts for aggrieved customers. There is no clear reason why this should be.

Does this mean that a customer who suffers unfairness must hope that the fos or the OFT or the FCA will become sufficiently interested to do their jobs?

 

Not necessarily. There is another approach.

Your bank or credit card issuer or lender have a legal -statutory- duty to treat you fairly. This means that this duty is implied into your contract by law.

If you suffer unfair treatment from your credit card issuer or lender then they are probably acting in breach of contract. You can use them in the county court for Breach of Contract.

 

Where there are clear instances of unfair treatment, suing for breach of contract is likely to be a straightforward matter and in the face of obvious unfairness, there is likely to be very little difficulty in persuading a judge to accept your arguments. Expect your bank/issuer/lender to back down very quickly.

 

So much to take in.

All a load of COBlers to me.

Let us hope COBS applies.To the payday lenders.

To much perhaps for the old owl.But enjoy trying

Edited July 29, 2013 by tawnyowl

[Tawnyowl]

Orfoster I am Just putting your letter on so people can see what you are getting at.Saves going back a page.

Ok well I for one took a PDL based on their advice that it "may/could" but really WON'T EVER improve your credit rating!

 

The Martin Lewis link above was correct at the time but now that lenders do treat it differently its out of date.

 

I am willing to lodge a complaint with Wonga (what harm can it do) and see their response and escalate if need be.

 

I wonder about lodging a complaint on the lines of;

 

 

COMPLAINT

Dear The Lepers of Lending,

 

I write in relation to a number of loans held with Wonga in recent years.

 

You are one of many PayDay Lenders who advise or have advised customers that by taking one of your products this will have a positive impact on their credit report, at no time did you warn me that taking one of your products would or could have a substantial negative impact on the way in which other lenders would view my credit worthiness despite being aware of this fact.

 

Wonga led me to take a financial decision that I would not have otherwise taken based on advertisements and assertions that by taking a short term loan this would have such an impact on my credit file.

 

You will be aware of the Conduct of Business rules laid down by the Financial Conduct Authority which specifically state that "a firm must act honestly, fairly and professionally with the best interests of its client" further the rules state "A firm must ensure that a communication or a financial promotion is fair, clear and not misleading".

 

It is clear that following seeking advice in this matter that having a product from Wonga does not in any way improve credit worthiness given that Credit Reference Agencies differentiate between payday lenders and mainstream lenders. A lender is more likely than not to view a payday loan as a sign of desperation.

 

I applied for my loan on the basis that you suggested that it would improve my credit file. I am frankly shocked that you would treat me in this manner.

 

I now require that you remove all reference of my dealings with you from my credit file as a gesture of goodwill in this matter or that alternatively that you compensate me for misleading me which has caused me to be viewed negatively by other lenders.

 

If you do not agree I look forward to your response including specifically and in detail the circumstances in which a Wonga loan would improve a credit score.

 

I look forward to your response.

 

 

Just a first draft.....any additions, removals? Thoughts, comments or otherwise?

Edited July 29, 2013 by tawnyowl

[citizenB]

I would have thought BCOBs would have been the way to go. I will ask for you

 

Although, having said that, I am not too sure now. I have asked others on the site team, but I wonder if it might be worth a call to the FCA ?

[Tawnyowl]

Well this has stopped us in our tracks.

2 jars of coffee drunk,3 pints of milk,a kilo of sugar.

1 loaf,and a jar of marmite.

Anyone else got any stories of how having a payday loan has affected you.Trying to get further credit.

A mortgage,finance etc.

Any thoughts experiences.

Any news from any of the previous posters.

I asked the question to the FCA on Twitter and someone else.

But no one answered

I feel like Billy No Mates

Edited July 29, 2013 by tawnyowl

[orfoster]

I thought COBs would apply but didn't realise one could't bring a claim under those regulations. So how would one pull up a lender in accordance with the FCA handbook? Using Financial Services and Marketing Act 2000?

 

I'd happily lodge the complaint as long as someone can help with the wording or legal redress points as above?

[citizenB]

I thought COBs would apply but didn't realise one could't bring a claim under those regulations. So how would one pull up a lender in accordance with the FCA handbook? Using Financial Services and Marketing Act 2000?

 

I'd happily lodge the complaint as long as someone can help with the wording or legal redress points as above?

 

Oh, can you not.. I will start nagging site team for some ideas