Complaints about payday loan firms have soared in the last financial year to March, according to the Financial Ombudsman. Most of the complaints were filed through claims management companies rather than by individuals, with 3,216 complaints about short-term loans in 2015/16. The previous year there were 1,157.
Payment protection insurance (PPI) generated the most complaints, with 88,712 in a year. Large numbers of complaints were also received about packaged bank accounts, where customers pay a fee but get benefits, doubling to 44,244.
Stricter Controls on Payday Lenders
New controls on payday lending firms came to force in January 2015, and included capping interest charges at 0.8% per day. Stricter affordability checks had already been introduced in the previous year, with the new controls leading to many payday lenders shutting up shop, according to a BBC report.
The Ombudsman said the increase in complaints reflected consumers’ increased awareness of their rights as well as the huge amount of publicity surrounding the loans, says a Guardian report.
However payday loan grievances are going up despite new controls being brought in by the Financial Conduct Authority. The biggest criticisms were over lenders not doing affordability checks, companies not agreeing repayment plans then chasing debts, and the use of continuous payment authorities which allow the lenders to take money from a bank account.
Borrowing to Pay for a Car
Many people take out loans to finance larger purchases such as furniture, white goods, electrical items and cars. Cars can be expensive to buy outright, so paying a monthly fee can be a good way to get a newer model at a rate you can afford. However, some companies may be unwilling to lend the money if you have a poor or bad credit rating. This could be because you have never borrowed money before and so do not have a credit history, or if you only pay off the minimum amount on your credit card each month, for example.
If you are looking for a company providing guaranteed car finance in Portsmouth such as rightdrive.co.uk bad car credit specialists can help.
Before taking out a loan, it makes sense to make a list of your income and existing outgoings such as rent, mortgage, bills and travel, so you know how much you can afford to repay on a loan each month.