Customers warned over unexpected payday loan charges


Customers warned over unexpected payday loan charges

RBS and NatWest are taking action to protect vulnerable customers.

Supporting individuals

29 October 2014

RBS and NatWest have today warned customers and the industry over unexpected payday loan charges.

NatWest and RBS are working with the banking industry, consumer groups and the media to raise awareness of unexpected charges some customers may face from payday loan brokers.

The issue became apparent after an increase in complaints from customers who reported having had money taken unexpectedly from their account. After further investigation it turned out that many of these customers had applied for a payday loan 6-8 weeks previously and had handed their details, including card and bank account information, to payday loan brokers. 

Payday loan brokers tend to operate online, offering to find loans, but are not lenders themselves. Many people who apply for a loan in this way are not aware of a clause which permits the payday broker to charge them to find a loan. The website may also share the customer’s bank details with as many as 200 other companies, which then also attempt to levy charges against them.

Some payday loan brokers are making as many as one million attempts every month to debit loan arrangement fees from the bank accounts of customers who are often already in financial difficulty. The sums usually range from £50 to £75 and are taken from customers’ accounts by companies they do not recognise, which are in fact payday loan brokers. The investigations carried out by RBS and NatWest revealed a pattern whereby funds were often debited weeks after a loan application had been made and regardless if it had been declined or approved.

Terry Lawson, Head of Fraud and Chargeback for RBS said: ‘Since July, we've seen large numbers of customers incurring charges they don't expect when using a payday loan broker. At its height, we were getting more than 800 calls a day on unexpected fees, but we're pleased to say we're seeing this decrease on account of the actions we're taking to help stop these sharp practices.’

RBS and NatWest are also working at an industry and regulator level to protect customers who may already be in vulnerable situations.  Payment arrangements with twenty payday loan brokers have ended and the bank is working with merchant acquirers to blacklist the brokers where possible. 

RBS encourages all customers to think very carefully before using a payday loan broker service and always to read the terms and conditions, plus additional information on the broker's website. If customers find they have paid these charges, they should contact the bank as soon as possible, so payment of further charges can be stopped and help can be given to recoup any funds already paid if possible. 

Customers can call 0800 161 5150 (Monday to Friday 8-8, Saturday 8-6 and Sunday 9-5).Outside of these hours call 0370 600 0459, and from outside the UK call (0044) 125 230 8047. You can reverse the charges on calls from abroad through the international operator when calling from a landline. 

 

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