You might have read in the news recently that we have taken a stand against the sharp practise of pay day loan brokers who we believe are hiding behind unclear terms and conditions. These T&C’s allow pay day loan brokers to share the information provided to them (including bank account details) to other companies who may then charge you for making an application. Because these companies never explicitly tell you how your information will be shared it’s incredibly difficult to know if you will be liable for charges until they come out of your account.
At its worst point we were getting over 600 calls each day from our customers who weren’t able to identify these transactions. We saw some customers charged by up to 10 separate companies, even though their original loan application had been unsuccessful. We decided that enough is enough and wanted to help raise awareness of this issue.
I’m happy to say that our call volumes are starting to fall, largely due to the work that we’ve done in partnership with payment acquirers to get these practises stopped . This means the merchants are placed on a ‘blacklist’ which makes it very difficult for them to continue to do business.
Today the Financial Conduct Authority announced new rules that will ban credit brokers from charging fees to customers unless they comply with new requirements ensuring that customers are given clear information about who they are dealing with, what fee will be payable, and when and how the fee will be payable. The rules come into force on 2 January 2015.
We’d urge 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 any of our customers think they might need financial help because of a situation like this then they should come and talk to us as soon as possible.