Pay Day Loans - damage to your future credit rating

[rodgerramjet]

Can you post links to the research be interesting reading

 

And trust me I'd love to have then removed as I want to renew my mortgage in a year or two

[BRIGADIER2JCS]

My research is done for professional purposes not on CAG.

 

There are many threads on here which will enlighten you.

[rodgerramjet]

Haha cheers

[ims21]

Just for information.....documents have been received from orfoster which confirms the statements made.

 

There is no reason that I can find that casts doubt on their authenticity.

[BRIGADIER2JCS]

Exactly what I would expect!!!

[rodgerramjet]

As I said and I'm glad I'm wrong

 

Orfoster I apologise if you think I called you a liar and I will follow your lead for having my own credit file cleaned up

 

One question the companies in question did you use them just the once or multiple times ?

[Tawnyowl]

Good luck rodgerramet.

I hope your credit file will be cleaned up.

As i hope as word gets round many people will now take them on.

Go, get those credit files cleansed of the pawprints of the predatory payday lenders.

Exciting refreshing news.

I will now retreat and calm down.

Got rather excited for a moment.

[orfoster]

As I said and I'm glad I'm wrong

 

Orfoster I apologise if you think I called you a liar and I will follow your lead for having my own credit file cleaned up

 

One question the companies in question did you use them just the once or multiple times ?

 

No problem.

 

Mixture, Quick Quid was a couple of times, Pounds to Pocket once.

 

In other news because I have had no response from PayDay UK nor Wonga I served a Letter Before Action on them both by e-mail yesterday.

 

Funnily enough an hour later Wonga responded.....

 

Thank you for your recent communication to us regarding our reporting of your data at the credit reference bureaux.

 

 

 

As a responsible lender we ensure that we both search and report credit entries fully in line with our privacy policy and our application terms and conditions. In addition, we report to the credit reference bureaux in accordance with our obligations under the principles of reciprocity (which are a set of guidelines governing the sharing of personal credit performance and related data via the closed user groups of the credit reference agencies*); such reporting is always undertaken in an accurate and up-to-date manner and is reported in relation to each loan taken out or applied for.

 

 

 

The credit reference bureaux we use are Call Credit (which can be contacted by clicking here) and Experian (which can be contacted by clicking here).

 

 

 

As stated above, we are responsible for reporting customers’ accurately, fixing it if there has been some inaccurate reporting, and disclosing our reporting policy clearly to you the customer. Once we have accurately reported our relationship with you to the credit reference bureaux, we are not responsible for how those lenders who use the reported data make decisions in relation to credit scoring. Other lenders set their own credit policy that we cannot influence at all. We draw your attention to the following Experian statement on its website **:

 

 

 

“as long as you repay the payday loan on time and in full then any effect on your credit rating is likely to be positive. When lenders check your credit report they are looking for evidence that you are a responsible customer. Repaying a payday loan on time and in full should therefore strengthen your case, because many payday providers are now sharing credit data. Saying that, some high street lenders might see the fact that you’ve resorted to payday credit as a sign that your finances are under pressure. Importantly, lenders’ scoring systems are built by modelling actual customer data. As a result, if a particular lender’s experience is that customers who take out payday loans are more likely to miss their repayments, this will be reflected in their credit scoring. Actually, some of the lenders that use Experian for credit checks don’t currently differentiate between payday and other types of loans, so they wouldn’t be able to discriminate anyway. So if you do take out a payday loan, just concentrate on paying it back on time and you shouldn’t hopefully have any problems”.

 

 

 

We also draw your attention to a statement made by Peter Mansfield, Managing Director of Callcredit Limited:

 

 

 

“ If a consumer takes out a payday loan and repays that loan on time the effect of such on the consumers credit rating could well prove positive. In some cases, if used responsibly, payday loans could help to improve the credit profile, especially those with either little credit history or those with a previous history of missed payments and arrears. However, it is difficult to generalise as the overall interpretation of the details contained on a consumer’s credit file is down to each individual lender.”

 

 

 

“Lenders create their own credit assessment scores and will include a complex selection of data sources within such scores. The lenders own experience based on the relative risk associated with different data, which includes previous loans and their performance, will be taken into account and could vary from lender to lender and for different subsections of consumers within each lender’s book.”

 

 

 

“Late and missed payments and large volumes of loans would have a negative impact on a consumer’s credit profile. However, for many lenders taking and repaying a payday loan will have a neutral or positive impact across large sections of their customer base. However, interpretation is at the individual lender’s discretion and some may view a payday loan as having a detrimental impact on some consumer’s credit worthiness.”

 

 

 

Taking into account our terms and conditions and our obligations to report an accurate account of our relationship with customers to the credit reference bureaux, and Experian’s statement above, we are unable to remove any searches, footprints or defaults that have been applied correctly from your file, however, if you believe that any searches, footprints or credit notices have been incorrectly applied by us, please contact [email protected] who will investigate the matter for you.

 

 

 

We hope that this sets out our position on this matter clearly.

[Ocelot0411]

Yeah I have had that too, standard response. Forge ahead. If anything it helps your claim as they are admitting that they knew it could have a negative effect on your credit file and told you the opposite anyway, so they are shooting themselves in the foot there. Also the 'responsibiliy' to report to CRA's only stems from their agreement with the CRA's, they do it purely to gain a commercial advantage and for no oher reason than that.

[BRIGADIER2JCS]

Orfoster, Please follow up those LBAs in writing by recorded delivery for your own protection, I've seen e-mail notifications denied in litigation recently, you need the signature of receipt!!!

[orfoster]

Orfoster, Please follow up those LBAs in writing by recorded delivery for your own protection, I've seen e-mail notifications denied in litigation recently, you need the signature of receipt!!!

 

Will do tomorrow. Thanks.

 

Can I just check, I understand that Wonga for example isn't regulated under FCA (?) so would a claim be brought for breach of contract? I don't believe they are directly held to COBs?

[Tawnyowl]

Seems to be the case orfoster.

A lender they are.

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.

 

I suppose it would be on the grounds of misrepresentation.

There are two essential steps in claiming a remedy for misrepresentation. The first is to show that a misrepresentation took place, and the second is to show that you have relied on the misrepresentation when entering the contract.

Which you did.

First, if a representation was made during negotiations, which later transpires to be no longer true, there is a duty to make a correction.[/url]

 

Previously.

Controversial payday loan firm Wonga has written to customers implying taking out one of its loans can "do wonders" for your credit rating.

 

The reality is often the opposite, as many lenders view the fact you've used a payday or short term loan as a negative, as it can be a sign you're in financial difficulty.

While the Wonga statement doesn't specifically say having a payday loan will help your credit rating, it says if you pay it off, and by implication that you therefore have one, you will benefit.

 

But it fails to mention, or warn customers, that even having a payday loan can make you look unattractive to other lenders.

 

 

And as you said-

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

.

Since 2012 when payday loans can now be seen by any lender on your credit file.

They are looked at by most as a sign of desperation.

When really many took them because of the lenders suggesting they would improve your credit file.

As you did.

 

It does say send everything by recorded delivery.

http://www.adviceguide.org.uk/england/letters/introduction_to_letter_for_misrepresentation.htm

Edited August 22, 2013 by tawnyowl

[Ocelot0411]

Have you tried the Ombudsman orFoster, just out of interest. I mean I know they are rubbish sometimes but I would be interested to know if anyone has ever brought this matter before the ombudsman and if so what the reaction was as I think I am going to try that route first. Bit unsure really as to which way to play it but will await my DSAR response from them first then decide.

[orfoster]

Have you tried the Ombudsman orFoster, just out of interest. I mean I know they are rubbish sometimes but I would be interested to know if anyone has ever brought this matter before the ombudsman and if so what the reaction was as I think I am going to try that route first. Bit unsure really as to which way to play it but will await my DSAR response from them first then decide.

 

Hi, No I haven't gone to the Ombudsman but would be interested to know how you get on.

 

I am now in the process of drafting POC for Wonga & PayDayUK both of whom have less than 14 days now to comply with my LBA (sent recorded delivery).

 

Does anyone have any ideas how the POCs should look?

 

Cheers

[orfoster]

I need to read up and think this through but I am claiming £250 for the misrepresentation (don't know if I should claim £250 for each time I took a loan) but should I be charging their interest rate for each of the claims?

 

Or would that only apply if charges were applied to the account????

 

Thoughts please?

 

I WOULD LOVE TO CHARGE THEM THEIR OWN RATE (as a matter of principal)!

[citizenB]

I think this is untried territory, whilst it is probably a more long winded route, I wonder if this might be best off dealt with by the FOS in the first instance. A successful decision from them would help those then wishing to go the court route.

[Ocelot0411]

Hmmmmmmmmmm I agree citizen B, it might be worth a shot with the FOS and quite happy to be the guinea pig on this one (once I get my DSAR) but my only fear is that I don't have that much faith in the FOS from previous experience and the effect of the FOS not upholding the complaint could obviously damage future court proceedings. Its a tricky one.

[citizenB]

Citizen's advice bureau are advising this course of action. Although I do agree, that a negative result from the FOS could result in making it difficult should anyone wish to take court action. At least it would give us the opportunity to rethink how we submit these claims.

 

IMHO, there could be far more damage caused if the first "test drive" of this were to end up in court being defended by barristers and the claimant were to lose. Rest assured, it will not be a case that the PDL companies would want to lose.

[Ocelot0411]

Again good point Citizen B. I will defininately go down the FOS route first - although I often find that you need to 'spoon feed' them and if you don't expect the very worst. I will of course keep you posted but its likely to be a lengthly one so lets not hold our breath.

 

I have to say the one thing I don't get is why is it so important to the PDLs to report on good accounts? Is this purely about them getting the info they want from other lenders on CRA's? I can understand the drivers behind reporting late payments / defaults etc, but why damage consumers so badly for impeccibly run accounts? It just seems ludicrous to me.

[orfoster]

Hello all,

I haven't posted for a while so thought I'd do an update.

 

So Wonga have really put their foot in it by saying a number of things that would have been really helpful on their website, so I have taken them to the FOS, I called the FOS first and had a discussion with them about the case and have now referred my bundle to them for their consideration, I expect its gonna take them about 8-12 weeks to carry out any sort of investigation/adjudication.

 

PayDay UK (WOW!) They're awful! I will post up their letter later on which really does avoid the issue.

 

Could someone tell me, on the CAB website about PDL's it talks about Continuous Payment Authority and that they should remind you before taking payment? Why does it say this, ie is there a rule or something? Have a look within this survey http://www.adviceguide.org.uk/england/debt_e/debt_borrowing_money_e/debt_types_of_borrowing_e/debt_loans_e/debt_payday_loans_e/dialogue_payday_loan_survey.htm.

 

But here;

the lender didn't set out clearly how continuous payment authority (CPA) works and your right to cancel it. CPA is where you agree to pay the loan by making a series of deductions from your credit or debit card

the lender didn’t tell you in advance that they were going to take money from your account using the CPA.

http://www.adviceguide.org.uk/england/debt_e/debt_borrowing_money_e/debt_types_of_borrowing_e/debt_loans_e/debt_payday_loans_e/payday_loans_reasons_to_complain_about_your_lender.htm

[orfoster]

Hello everyone,

Just another update about Vivus.co.uk.

They have offered full removal of ALL information from credit file + £250 settlement.

This was following sending an LBA. (They'd ignored all correspondence up to that point).

[citizenB]

Hello everyone,

Just another update about Vivus.co.uk.

They have offered full removal of ALL information from credit file + £250 settlement.

This was following sending an LBA. (They'd ignored all correspondence up to that point).

 

Excellent news

[BRIGADIER2JCS]

A very good result:whoo:

[orfoster]

Just a quick update;

FOS are now on the case with both of my complaints against Wonga & MEM Consumer Finance (Pay Day UK).

Is anyone else on this thread going down the FOS route?

Currently Wonga have been given 12 weeks to supply FOS with info (9 now).

[citizenB]

It doesn't appear so, orfoster - although I have posted the links to making complaints to the Ombudsman on several threads over the last few weeks.