FOS reports 'significant' increase in payday loan complaints

So far this year (1 Jan – 30 Sept 2014) the FOS have taken on 613 new payday loan complaints, compared to the 506 in the same period last year (to end Sept 2013) – a 20% increase.

Of these cases, two thirds ruled in the consumer's favour.

The ombudsman has published an insight report into payday loan business’ practices, looking at the complaints seen and how consumers are being treated.

In many of the complaints, the lenders have not told the consumer that they are entitled to bring their complaint to the ombudsman.

The ombudsman reported that the treatment of vulnerable consumers has been 'alarming', with many reluctant to admit they are struggling financially.

The main complaint themes are that the loan provider is unwilling to accept a suitable repayment plan; the lenders use of continuous payment authorities has left them without money to pay their bills; poor administration and customer service as well as complaints about debt-chasing; complaints about damage to people’s credit records; and complaints from consumers that a payday loan was taken out in their names fraudulently.

A spokesperson for the ombudsman said:

“We regularly hear from people whose debt is keeping them awake at night, they took out a payday loan as a desperate last resort and their debt problems have got worse instead of better.

“Don’t suffer in silence. If you have a problem with a payday loan that you can’t sort out, don’t hesitate to get in touch with the ombudsman. We’ll help you quickly get things sorted."