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Payday complaints double in two years, says watchdog | Payday complaints double in two years, says watchdog |
(about 9 hours later) | |
Complaints about payday loans have more than doubled in the last two years, according to the Financial Ombudsman. | Complaints about payday loans have more than doubled in the last two years, according to the Financial Ombudsman. |
The service took on 794 new complaints in the year to April 2014, compared with 296 in 2012. | The service took on 794 new complaints in the year to April 2014, compared with 296 in 2012. |
The financial watchdog also warned that many other people might have been too ashamed to come forward and make a complaint. | The financial watchdog also warned that many other people might have been too ashamed to come forward and make a complaint. |
The payday industry has argued that it has already changed significantly, and is adhering to new rules. | The payday industry has argued that it has already changed significantly, and is adhering to new rules. |
The most common complaint came from customers who claimed they had not taken out a loan in the first place. | The most common complaint came from customers who claimed they had not taken out a loan in the first place. |
In some cases, that was because of criminal fraud, said the ombudsman. | In some cases, that was because of criminal fraud, said the ombudsman. |
In other cases, someone else in the customer's family used their name to take out the loan without telling them. | In other cases, someone else in the customer's family used their name to take out the loan without telling them. |
Cap on credit | Cap on credit |
However, the number of complaints is still tiny, in comparison to the total number of loans. | However, the number of complaints is still tiny, in comparison to the total number of loans. |
The Competition and Markets Authority (CMA) recently calculated that more than 10 million loans were taken out in 2012. | The Competition and Markets Authority (CMA) recently calculated that more than 10 million loans were taken out in 2012. |
Last month, it ruled that a lack of competition between lenders could be costing customers up to £60 a year. | Last month, it ruled that a lack of competition between lenders could be costing customers up to £60 a year. |
The Consumer Finance Association (CFA) - which represents some of the lenders - said it was committed to new rules that came into force on 1 July. | The Consumer Finance Association (CFA) - which represents some of the lenders - said it was committed to new rules that came into force on 1 July. |
Lenders can now extend - or "roll over"- a loan on a maximum of two occasions. | Lenders can now extend - or "roll over"- a loan on a maximum of two occasions. |
There is also a limit on how many times they can use a Continuous Payment Authority (CPA) to take money automatically from a borrower's account. | There is also a limit on how many times they can use a Continuous Payment Authority (CPA) to take money automatically from a borrower's account. |
Unless a CPA is successful in extracting the money owed, it can only be used twice. | Unless a CPA is successful in extracting the money owed, it can only be used twice. |
The Financial Conduct Authority (FCA) is expected to announce details of a proposed cap on the cost of credit provided by payday lenders next week. | The Financial Conduct Authority (FCA) is expected to announce details of a proposed cap on the cost of credit provided by payday lenders next week. |
Have you taken out a payday loan? Have you made a complaint about a payday loan company? You can email us at haveyoursay@bbc.co.uk using the subject line 'payday loan'. |