Driffield people suffering financial hardship are being warned to avoid turning to payday loan companies.
Hull & East Riding Citizens Advice Bureau, which has a branch in the town, says that loans from credit unions are far more affordable - there is one on Market Walk.
Three in four payday borrowers who got advice from the national Citizens Advice consumer service had been treated unfairly by their lender and could have grounds for an official complaint to the Financial Ombudsman Service, said the national charity.
In August 2013, Hull and East Riding Citizens Advice Bureau launched a new campaign urging payday loan customers not to let predatory lenders get away with treating them unfairly.
Just 2 weeks ago, Hull and East Riding CAB helped one person who had numerous payday loans and was struggling to meet the repayments. The client was then receiving letters threatening further action.
Citizens Advice’s in depth analysis of 665 payday loan cases, reported to its consumer service between 1 January and 30 June 2013, finds that at least 76% could have grounds for an official complaint to the Financial Ombudsman including:
1 in 5 were possible cases of fraud – where a person was chased for a loan they hadn’t taken out.
More than a third involved issues with continuous payment authorities including money that was not authorised to be taken.
12% involved harassment whereby lenders pester people with phone calls and text messages rather than accept affordable repayment offers.
1 in 10 were about lenders’ unfair treatment of people in financial difficulties.
Latest figures from the national Citizens Advice payday loan tracker reveals that 4 out of 5 were not told by their lender how to complain if there is a problem.
Consumers who are finding it difficult to raise their payday loan problem with their lender can contact the Financial Ombudsman who will help them through the complaint process. There were 160 complaints made to the Financial Ombudsman between April and June this year about payday loans, with 72% upheld in favour of the consumer.
If a complaint is upheld by the Financial Ombudsman – and the consumer has lost out as a result – the lender can be ordered to put things right. Consumers could get a refund on loan repayments, interest or default charges or compensation for any inconvenience caused.
Citizens Advice payday loan tracker also found that 71% of payday loan customers felt they were put under pressure to rollover their loan and 3 in 4 people had repayment problems.
Lesley Thornley, Chief Executive of Hull & East Riding Citizens Advice Bureau said: “We are urging people to stand up to payday lenders who have treated them unfairly by making a complaint. People come to the bureau after lenders have taken money from their bank account without permission or prior warning or have chased them for debts they didn’t have. Consumers often feel powerless against big business but if you’re complaint is upheld by the Financial Ombudsman you could get money back that was wrongly taken or compensation for poor treatment.”
As part of the campaign Citizens Advice has launched a new online animation to help people get on top of their payday loan problems. It explains that payday lenders aren’t allowed to take money from your bank account without you knowing, nor should they put pressure on to borrow more money or contact you at all hours of the day. Citizens Advice is also taking to Twitter with the hashtag #paydaywatch as bureaux from across the country tweet about payday loan cases they are helping with.
Advice tips if you’re struggling to repay a payday loan:
Your payday lender should accept a repayment offer which is reasonable.
Don’t be pressurised to extend your loan – it will cost you more
It’s not ok for your lender to ring you during the night or more than once a day chasing you for money, or to contact your employer.
You should be able to get in contact with your payday lender.
If you are having these problems you can do something about it
Make a complaint by filling in our simple checklist at www.adviceguide.org.uk
Get advice from adviceguide.org.uk, from the Citizens Advice consumer service or your local bureau
Advice tips if you are in financial difficulty and considering a payday loan:
Get help with your money troubles. Your local Citizens Advice can provide debt advice and help you sort out your finances. By making a few changes you may be able to avoid taking out a short-term loan.
It is important to consider all the other options available to you before taking out a payday loan as they are expensive and could make your money problems worse.
Pay day loans can be a costly way to deal with short term financial problems and are not suitable for long term money troubles.
A loan from a credit union is more affordable – check if there’s a credit union in your area.
If you have a bank account, you may be able to agree an overdraft. But be careful of going overdrawn without permission and make sure you understand any fees and charges.
If you are thinking about taking out a payday loan to pay off other debts, don’t. Instead, speak to the companies you owe money to and agree a repayment plan. You can get help with debts from www.adviceguide.org.uk or your local Citizens Advice Bureau.