9th October 2014
As the Competition and Markets Authority (CMA) sets out proposals to shake-up the payday lending industry the Financial Ombudsman Service (FOS) has reported that complaints against the controversial sector have jumped considerably.
The FOS said there has been a significant increase in the number of payday lending grievances brought to its attention over the past couple of years and is now currently taking on around 70 new cases each month.
So far this year it has taken on 613 new payday loan complaints, compared with the 506 in the same period last year, marking a massive 20% increase. Notably the free service has consistently found in the consumer’s favour in around two-thirds of cases over the past year – the vast majority of which have been swiftly resolved.
The POS has published an insight report into payday loan business’ practices, looking at the complaints it sees and how consumers are being treated. Of the complaints in the report, in far too many cases it said, the lenders have failed to tell consumers that they are entitled to bring their complaint to the service. It added that “the treatment of vulnerable consumers has been alarming” and that it has started to receive complaints from consumers who claim that a payday loan was taken out in their names fraudulently.
The FOS 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.”