PDL MYJAR Irresponsible Lending Claim

[johealey]

Hi

 

In 2017 I had a loan with MyJar and paid it off,

then had a further loan in 2018 and paid that off. 

I now have a further loan with them which I am in an arrangement to pay. 

 

I have read into the Irresponsible Lending and wondered whether it was worth trying to claim back all the interest and charges,

could someone please read my template below so I can get the ball rolling

- I just want to make sure I haven't missed anything vital! 

Also how far back to do I go with the statutory interest? 

Thanks 

 

I wish to log a formal complaint in relation to irresponsible lending.

To begin with, you should formally be aware, the FCA took over regulation of the credit market from April 2014 and then imposed caps on all high-cost short-term credit (HCSTC) in 2015. I am aware that this only applies to Payday, Instalment and Rolling Credit Loans.

 

These rules were set to stop irresponsible lending and they included;

 Affordability checks for every credit agreement to ensure that only consumers that can afford a loan can get a loan

Rollovers

Limiting loan rollovers to two;

Limiting the number of attempts by a payday lender to use CPAs to pay off a loan, to two;

Information on where to get free debt advice will be given to every borrower that rolls over a loan

Treat Customers in Arrears more fairly.

Do not relend to customers who appears to have taken numerous loans in a short period.

Report information correctly to the CRAs & limit daily interest to below 0.8% per £100 borrow. Default charges limited to £15 or less / Can only be applied once per loan.

 

But also, the FCA also stated that lenders should implement their own policy and change how they lend to customers. This may have included issuing “Do Not Relend” markers or other criteria.

 

I feel to bring to your attention that I believe you may have failed under the above because of the below points;

 

• Before / During / After / Before & After, you were lending to me on a regular basis shown in the statements provided by your company
• You did not do appropriate checks. Should you have used the appropriate Due Diligence, you would have seen that I was under a tremendous amount of financial pressure / other debts that would make these loan / loans unaffordable. This pushed me into arrears / however didn’t push me into arrears on my priority debts.
• Should you have done the appropriate affordability checks at the time of every loan, you would have seen that I would have had more than 1 loan on the go / a large proportion of my outgoings servicing other accounts. These included Credit Cards / Other Payday Loans / High APR Finance / Logbook Loans / Other Debts. - On my Credit Files with the 3 major agencies (Callcredit, Equifax / Experian), I cannot find any searches that had been completed at the time of a loan being offered. While the searches may have disappeared, I would have expected to see something that shows your firm did a “Hard” search to check my financial commitments and I would request that you prove you did complete this along with providing evidence you completed affordability checks. - I was using these loans to pay off other loans to **Companies** and this ended up creating a spiral of debt
• My finances and/or personal situation was not sufficiently checked to make sure I’d be in a position to pay back the loan.
• I was not told by the lender that a payday loan should not be used for long-term borrowing or if I was in financial difficulty.
• I was not told by the lender what to do if I had a complaint.
• It was not made clear to me by the lender how continuous payment authority works and my right to cancel it.
• When I couldn’t repay the loan the lender didn't offer to freeze interest and charges
• When I couldn’t repay the loan the lender didn't tell me about free and independent debt counselling organisations.
• When I couldn’t repay the loan the lender didn't tell me about the risks of extending the loan.
• When I couldn’t repay the loan the lender didn't make clear exactly how much it would cost to extend the loan.
• When I couldn’t repay the loan the lender didn't check my personal finances and general situation to see if you're able to pay back an extended loan.

 

I am bringing this to your attention because I believe that you as a lender did not treat me with comply with section 5 of the CONC Sourcebook on Responsible Lending or use Due Diligence upon my applications and have allowed me to get into this position. I also would expect a company to check bank statements as part of their underwriting criteria for HCSTC. I would also expect that with your authorisation to trade under the OFT / FCA, you would have had stringent underwriting criteria.

 

Loans were taken out:

 

• £1,000 on 5^th November 2017 and settled on 22^nd November 2017
• £1,475 on 5^th December 2017 and settled on 6^th February 2018
• £800 on 16^th March 2018 and settled on 18^th July 2018
• £725 on 23^rd July 2018 and is currently in an Arrangement to Pay  

 

I am writing to you to ask you to refund the interest and charges I paid, currently totalling X, plus statutory interest totalling X, and to delete any negative information from my files with all credit reference agencies.

 

As outlined in the Financial Conduct Authority’s guidance on irresponsible lending, you have a duty to treat me fairly and consider my request if a customer informs you they are not able to make payments.

 

If I’m not happy with your response, I will take my complaint to the Financial Ombudsman Service. I’m aware that you have eight weeks in which to look into my complaint and respond. I look forward to receiving your response.

 

I look forward to your response within 8 weeks, otherwise I will not hesitate in taking my complaint to the Financial Ombudsman Service.

 

Yours faithfully,

[johealey]

Hi, as I didn't hear anything on here, I went ahead and submitted the letter to MYJAR who have now responded.

 

Thank you for contacting us.

 

We are sorry that you have felt it necessary to complain to us. We want to address your concerns as soon as we can and as fairly as we can.  To assist us to do this, please provide us with the following information:

 

• Bank statements (at the time/s you took out your loan/s with us showing the below data)
  • Bank name and logo
  • Account holder’s name
  • Account number and sort code
• Pay slips (at the time/s you took out your loan/s with us)
• Any additional information relating to your financial circumstances (at the time/s you took out your loan/s with us)

 

We are asking you for this information to support the claims you have made to us in your complaint. 

This information will assist in our investigations and allow us to ensure you get the fairest outcome once our investigation is concluded.  

We are happy to discuss this request with you further, if you have any questions please do not hesitate to contact us.

 

When we have considered the complaint in detail, we will either issue our final response providing you with our decision on the outcome of the complaint and the reasons for this or, an explanation of why we are not yet able to resolve the complaint. 

 

If you do not provide supporting information as requested, we will still investigate your complaint and do our best to reach a fair outcome, however the more information we have to assess your circumstances at the time you took out a loan the easier it becomes to conclude the outcome.

 

The final response will also provide information relating to the Financial Ombudsman Service and how you can contact them, if you are dissatisfied with our resolution. For information, please find a link to our complaint’s procedure: https://myjar.com/contact/complaints.

 

We deal with complaints in the order that they are received and aim to resolve them all within 4 weeks or less but definitely not later than eight weeks from receipt of your complaint.

 

Should you have any queries now or at any point, please do not hesitate to contact us on 020 337 13061 or you may request a call from us by texting the words “Ring Me” to 0786 000 4500.

 

Kind Regards,

 

 

The Complaints Team

 

Could someone please advise, because I do not feel I should be providing this information?

 

Thanks 

 

 

 

[dx100uk]

correct you shouldn't.

 

[johealey]

Thanks, that what I thought!

 

Is there a standard letter to send back or do I just write one?  Sorry to ask, my PDF is corrupted at the moment so cannot open the guide to read the next steps!

 

Thanks 

[dx100uk]

pers I wouldn't bother

its for them to carry out these checks BEFORE they lend to you

not afterwards.

 

dx

.

 

[fkofilee]

DX is correct... And I can confirm that as part of lending they should have conducted rigorous checks to ensure that lending to you was the right option. 

 

If they failed to do so and your Income to Loan Repayment was too low or you had numerous defaults then they shouldn't have issued a Loan. 

[johealey]

Ok thanks both, just waiting for their reply now and will keep you posted

[johealey]

Hi - I have now received the following back from MyJar:

 

 

We have investigated the circumstances surrounding the complaint that you raised with us on 05 November 2019 and hope that this response resolves the issue to your satisfaction.

 

We are sorry that you have felt it necessary to complain and thank you for taking the time to share your concerns with us.

 

Your Complaint

 

Your complaint relates to the affordability checks we carried out before lending to you. In your complaint, you have told us that the loans we provided to you were unaffordable and you have requested a refund of the interest and charges you paid on those loans.

 

Your History with Us

 

We have reviewed your account and see from our system records that you took the following loans from us:

 

	Date Issued	Date Closed	Loan Amount	Total Paid
	2017-11-05	2017-11-22	£1,000.00	£1,110.50
	2017-12-05	2018-02-06	£1,475.00	£1,800.23
	2018-03-16	2018-07-18	£800.00	£1,090.17
	2018-07-23		£725.00	£125.00

 

At the time you applied for your loans, we undertook a number of checks, which included information provided by you in the application, up-to-date credit reference agency information, searches on public databases, fraud checks, credit scoring and information about you from our own records, such as past borrowing and repayment behaviour. Considering the above information enabled us to decide the most appropriate loan options for you.

 

Each time you borrowed, we asked you to confirm or update the information that we held about you and you did this on four occasions.

 

We did not allow you to rollover any loan that you had and each loan needed to be repaid in full, before you could apply for a further loan.

 

Our Investigation and conclusions

 

We have carefully considered your complaint and based upon the information we hold on our records, further information that you may have provided since raising your concerns and drawing upon learnings from the Financial Ombudsman publications and decisions relating to similar complaint outcomes, we conclude the following;

 

We checked to confirm that MYJAR performed the checks outlined above in order to make a decision that the loans were appropriate for you, and we can see that it did.

 

We then looked at your overall borrowing history and we can see from loan four, it appears that a pattern or chain of lending may have occurred, combined with other factors such as late repayments, early repayments, short periods between closing a loan and then taking out another (although this is not an exhaustive list).

 

We would also like to inform you that we do not have access to your Credit File, whilst on application you are asked to provide this we do not require it for every loan as this can have negative implications for your credit score. If you would like to send one in we would be happy to take it and re-investigate provided it is official documentation and has personal details on it such as your name.

 

Our Decision

 

Taking the above factors into consideration we have made a decision in your favour, therefore MYJAR will be partially upholding your complaint on the basis that lending to you from loan four may not have been appropriate.

 

To put things right for you, we will waive all charges and interest on this to bring it to the principal amount of  £725.00.. We will then deduct the amount of £125.00 which you have already paid bringing you a new Outstanding balance of £600.00 still to pay. 

 

We at MyJar know this is a large amount but this amount will be permanently frozen and you can set up a payment plan with us that is affordable to you.

 

We will also remove any negative information reported regarding these loans and arrange to show these loan entries on your credit file as settled and closed. We cannot remove the entries fully as we are obliged to maintain accurate records with the Credit Reference Agencies. 

 

We trust this letter brings the matter to a close for you, should you agree to our decision we would ask that you complete and return the attached settlement form.

 

We hope the explanation in this letter satisfies all the concerns you raised in your complaint.

 

However, if you remain dissatisfied, you may refer your complaint to the Financial Ombudsman Service. You have the right to refer your complaint to the Financial Ombudsman Service, free of charge – but you must do so within six months of the date of this letter.

 

If you do not refer your complaint in time, the Ombudsman will not have our permission to consider your complaint and so will only be able to do so in very limited circumstances. For example, if the Ombudsman believes that the delay was as a result of exceptional circumstances.

 

You can find information about how to contact the Financial Ombudsman Service on their website: www.financial-ombudsman.org.uk. You can also find the Ombudsman’s leaflet ‘your complaint and the ombudsman’ at: http://www.financial-ombudsman.org.uk/publications/consumer-leaflet.htm to assist you with your decision.

 

 

 

 

I would appreciate any assistance with whether to go back and accept or whether I write back and request the full interest and charges that were applied to these accounts, which amount to around £700?

 

Thanks 

[dx100uk]

they should not have loaned to you

and the fact that they cant access CRA files is utter twaddle.

 

dx

[fkofilee]

 People dont think and put together proper coherent letters...

 

Quote

At the time you applied for your loans, we undertook a number of checks, which included information provided by you in the application, up-to-date credit reference agency information, searches on public databases, fraud checks, credit scoring and information about you from our own records, such as past borrowing and repayment behaviour. Considering the above information enabled us to decide the most appropriate loan options for you.

 

Quote

We would also like to inform you that we do not have access to your Credit File, whilst on application you are asked to provide this we do not require it for every loan as this can have negative implications for your credit score. If you would like to send one in we would be happy to take it and re-investigate provided it is official documentation and has personal details on it such as your name.

 

Multiple Searches can harm especially if taking numerous loans at one but when you get to this point... Well... Your CRA is doomed for a while anyway.

[johealey]

I queried this with them where they have contradicted themselves, went back and said i want all charges and interested refunded, but they are standing by their decision - off to the FOS I go

 

I assume I need to keep up the repayment plan whilst the FOS investigate and any monies due to me will get refunded, if any?

[fkofilee]

Yes please keep the payments running - Depending on the result - All markers on your CRA can be removed / amended. 

[johealey]

Thanks and sorry for the delay in responding!

 

QQ - before I go to the FOS, do I just send them a covering letter and attach all correspondence so that they can review the case?

 

I have another one to do for another PDL company so just want to ensure I am following the correct process

[johealey]

it has been some months and the FOS have now come back to me and have denied my complaint! 

Any advice as to whether this is it or whether I can go back to the FOS would be greatly appreciated,

first time I have ever done something like this so any guidance, would be great, thanks

 

Dear XXXX

Your complaint about MYJAR Limited  trading as MYJAR

 

I’m getting in touch to let you know that I now have an answer for you.

 

This assessment is based on the information provided so far.

If you or MyJar is able to provide me with further information by 13 July 2020, I’ll be happy to look at it.

 

From what I’ve seen you were given the following four loans by MyJar:

Loan	Date Taken	Date Repaid	Instalments	Amount	Highest Repayment
1	05/11/2017	22/11/2017	6	£1,000.00	£284.63
2	05/12/2017	06/02/2018	12	£1,475.00	£266.20
3	16/03/2018	18/07/2018	12	£800.00	£117.87
4	23/07/2018	outstanding	12	£725.00	£110.82

 

MyJar have made you an offer on loan 4 which is inline with our approach had I upheld this loan.

I have not included loan 4 in my assessment as MyJar have confirmed that this offer is still available to you. 

 

I’ve reviewed all the evidence provided by both sides in this case and I’m not upholding your complaint. 

 

What we think about when looking at short-term lending complaints

You were provided with high-interest loans, intended for short-term use.

So MyJar needed to make sure that it didn’t provide them irresponsibly.

 

In practice, what this means is that MyJar needed to carry out proportionate checks to be able to understand whether any lending was sustainable for you before providing it.

 

Our website sets out what we typically think about when deciding whether a lender’s checks were proportionate. Generally, we think it’s reasonable for a lender’s checks to be less thorough – in terms of how much information it gathers and what it does to verify that information – in the early stages of a lending relationship.

 

But we might think it needed to do more if, for example, your income was low or the amount lent was high. And the longer the lending relationship goes on, the greater the risk of it becoming unsustainable and the borrower experiencing financial difficulty. So we’d expect a lender to be able to show that it didn’t continue to lend to a customer irresponsibly.

 

What I think this means for your case

I’ve thought about all of these issues in the individual circumstances of your case, and I don’t think MyJar irresponsibly provided your loans to you.

I’ll now explain why.

 

I’m sorry to hear that you were struggling financially and that repaying these loans may have been difficult. 

But given your loan amounts, what was apparent about your circumstances at the time and your history with the lender, I don’t think it would’ve been proportionate to ask you for the amount of information needed to show the lending was unsustainable. 

 

There wasn’t anything in the information you provided or the information MyJar should’ve been aware of, which meant it would’ve been proportionate to start verifying what you were saying.

 

For the later loans, I think the lender should’ve taken steps to build a more detailed picture of your financial situation. But I haven’t seen anything in the information provided which suggests the lender would’ve known that you wouldn’t have been able to sustainably make the repayments you needed to for these loans.

 

Finally, I don’t think that the number of loans you took, the amounts they were for or the period of time you were borrowing meant your loan history, on its own, should’ve shown MyJar you might’ve been experiencing underlying financial difficulty.

 

I understand that loan 4 is currently outstanding and would remain so after the offer has been applied, as such I would like to remind MyJar of its obligations to treat you fairly if you’re having difficulties repaying the loan.

 

What happens next

I hope my explanation has been helpful. If you’re happy with what I’ve said, you don’t need to do anything – and we’ll close your complaint.

 

I think this is a fair outcome in the circumstances, for the reasons I’ve explained.

But if you decide that you don’t accept what I’ve said, then please let me know by 13 July 2020.

 

If I can’t resolve things then an ombudsman here can look at everything again and make a final decision.

If I don’t hear from you by that date we might not be able to look at your complaint again.

 

If you have any questions – or need more time – please get in touch by 13 July 2020 and we’ll be happy to help.

[dx100uk]

was not your credit file shot at the stage of each lending?

[johealey]

In 2017 I had 10 Defaults and 3 CCJs.  2 of the CCJs were paid and settled in July 2017.  One falls off in Sept 2020 and the other in March 2021.

 

October 2019 was the first Default to drop off and they have all started to drop off in the last few months, so yes during each loan period all 10 Defaults would have shown on my credit file

[dx100uk]

and did you send proof of all this to the fos...and pointed it out?

 

 

dx

[johealey]

I did in the original letter, but I am now putting together a response along with a spreadsheet showing all of these and ask for the decision to be reviewed.

 

Would it be ok to put the draft letter on here for advice before sending please?

 

Thanks 

[fkofilee]

As our "resident specialist" on IRR Lending - YEs it would be a good idea for you to do that and I will look at this for you when you do. 

[johealey]

Amazing thanks, I am not sure what to type as this is the first time I have got to this stage with the FOS, but my letter below is a start and would appreciate any comments/amends to suit:

Complaint about MYJAR Limited - Trading as MYJAR Reference Number XXXXX   Thank you for your email of the 29th June 2020, the contents of which are noted.   I have to say I am somewhat surprised and disappointed by the outcome of this and I would like to explain why.   Firstly, I attach a spreadsheet showing the state of my credit file.  This show the Default date to/from the amount of the Default, including CCJs.  In total I had 10 Defaults and 3 active CCJs at the time of the first loan taken out with MyJar.   Two of the CCJs were paid off in July 2017, however, and still remain on my credit file until September 2020/March 2021 respectively.   This should have been a sufficient warning to MyJar that they should not have lent any monies to me whatsoever.  However, they went ahead and, as you can see continued to lend to me each time, when all of the Defaults and CCJs were still active on my credit file.   Also, with regards to the table below, you can clearly see that another loan was taken out straight after the existing one.  I understand that you cannot have more than one MyJar loan at any one time, but what I would do is use my salary to clear the loan and then borrow again from MyJar to cover the amount that I had paid off….. in a sense “robbing Peter to pay Paul”.

 

Loan	Date Taken	Date Repaid	Instalments	Amount	Highest Repayment
1	05/11/2017	22/11/2017	6	£1,000.00	£284.63
2	05/12/2017	06/02/2018	12	£1,475.00	£266.20
3	16/03/2018	18/07/2018	12	£800.00	£117.87
4	23/07/2018	outstanding	12	£725.00	£110.82

 

I would also like to state that Loan 4 is still outstanding as the account has been placed on hold whilst the investigation took place with yourself.  They have, however, offered me a settlement figure of £600 and to clear this balance at a rate that is acceptable to myself.

 

Looking back at previous correspondence, I still feel that all interest and charges that I have paid should be refunded.  This totals £725.90 across all loans.  This would therefore settle Loan 4 of £600 and the remaining monies of £125.90 owed to myself.

 

I would therefore ask that my case is reviewed with the additional information stated above.

[johealey]

Hi, I submitted the above letter as I sadly didn't hear anything on here and had a deadline to hit.  The letter has been rejected and they are standing by their decision.  I have asked for this to be escalated to the final hearing to see if they agree or whether I get a positive outcome

[dx100uk]

you mean you want it escalated to the ombudsman  rather than an adjudicator..?

[johealey]

That's the words I was looking for

 

I don't hold out much hope as its already been rejected once, however, given the state of my credit file at the time I cannot see how they can get away with winning this one!