The Financial Conduct Authority (FCA) is capping the cost of buying from BrightHouse, PerfectHome and other pay weekly shops from April 2019. This is very good news. It is not just a cap on the interest, where the FCA has imposed the same 100% cap that currently applies to payday lending. The FCA is also proposing controls over the prices of the goods the shops are allowed to charge. … [Read more...]
Can a debt collector or a lender call you at work?
A reader asked: I work in a Finance Department and I am worried I will be called by a debt collector about a credit card. Can I say I don't want them to call me at work? This is a common worry. Whatever your job, you don't want your manager or your colleagues to know you have money problems. It could be a lender or a debt collector, it could be an overdue bill or a debt. Creditors should … [Read more...]
What happens after an IVA fails? What can you do?
Your IVA seemed like the perfect solution when it began, but now it may be failing. Will you be back to square one and have difficult creditors to deal with? Or could you even be made bankrupt? First, there may be ways to rescue your IVA An IVA failing may not be a disaster, for some people there are better options! That's what the rest of this article looks at. But don't assume nothing … [Read more...]
How the Wonga administrators will handle refunds – the Proposals
The Wonga Administrators sent a letter in late October to some of Wonga's creditors with their proposals to handle the administration. These include: background on the events before administration; how to decide the payday loan affordability complaints that have already been sent to Wonga; and how to encourage other customers to submit a complaint. These Proposals were agreed by a … [Read more...]
QuickQuid – misleading customers about loans over 6 years old
Mr X has received a reply from QuickQuid saying why it will not consider an affordability refund on payday loans that are more than six years old. This part of QuickQuid's reply isn't related to the details of Mr X's case. It looks like a standard response QuickQuid is sending everyone whose complaints include these older loans. I often see pretty poor replies from payday lenders to people … [Read more...]
Dear Payday Lender CEO – should you start a redress program?
On October 15, the FCA sent a Dear CEO letter entitled Affordability of High Cost Short Term (HCST) loans to payday lenders. This letter tells the lenders to review their affordability assessments. There are some very clear points about what the FCA expects a payday lender to do if it is not making good affordability assessments now or hasn't done in the past. "Chains of loans" over an … [Read more...]
2018 – Ombudsman decides it can look at payday loans over 6 years old
The Financial Ombudsman (FOS) has published in September 2018 two Decisions involving payday loans over six years old: Mr H has complained about fifty-four payday loans Lender C lent to him between March 2010 and September 2014. Mrs W’s complaint is about nine short-term loans from Lender D between November 2009 and July 2012. In both cases FOS has decided that its rules do allow it to … [Read more...]
IP regulation – Insolvency Service find major problems
The Review of the monitoring and regulation of insolvency practitioners that was published by the Insolvency Service last week found evidence of many of the problems in Individual Voluntary Agreements (IVAs) that I and other free-sector debt advisers have been talking about for several years. Although it is often not specific about what has to be done, the report is clear that change has to … [Read more...]
Debt free – what do you do now?
All your unsecured debt gone? Good news! Some online forums call this “your happy dance” and you are certainly entitled to have a twirl around and pop into your local coffee shop for that coffee and cake you have been avoiding for so long. Still no spare money though? For some people, getting rid of your debt doesn't dramatically change your life or your options. If you have had a Debt … [Read more...]
Lessons to be learned from Wonga – 6 policy challenges
It's now a few weeks since Wonga went into administration. This seems like a good point to ask some difficult questions about the lessons from Wonga and what should be done to reduce consumer harm in future. Much of the media coverage has gone as follows: Wonga was the worst - then the FCA fined them and made them write off debts in 2014 and introduced good payday loan regulation in 2015. … [Read more...]
Why affordability refunds are easier WITHOUT a claims company
Does using a claims company make it easier to get a payday loan refund? Is this worth paying their expensive fees for? The answer turns out to be using a claims company may be slower, give you poorer advice and may get a lower refund than making a complaint yourself. And they are certainly very expensive! "But I don't know if I have got a good complaint" Many of their websites say things … [Read more...]
Adding Liability Orders to credit records – a bad idea!
County Court Judgments (CCJs) are added to people's credit records, so why shouldn't the same be done for Liability Orders (LOs) for council tax arrears? This is a really bad idea, involving major problems and costs for local authorities and magistrates courts. These would massively outweigh the potential benefits. Magistrates Court Liability Order processes are not comparable to County Court … [Read more...]
Identity theft – what you need to do
This article grew out of a reader's question. Mrs J, asked: Since February my husband has started to receive letters from WageDay Advance, Satsuma and QuickQuid saying that he has loans with them that need repaying. He doesn’t have any loans. We have sent Prove It letters to all three. We have now had letters saying that WageDay Advance and QuickQuid have passed the account to debt … [Read more...]
“When will my credit score improve after settling my IVA?”
A reader who has settled his Individual Voluntary Arrangement (IVA) early asked: My IVA is still showing on my credit history. The start date was January 2018. It was settled early after 3 years in 2021. I have been removed from the Insolvency Register. I have now been told that I have to wait for another 18 months until 2024 before the IVA will be removed. Is that right? I am sure you have … [Read more...]
Mortgage repossession and your credit record
A reader, Mr D, asked: I had a mortgage shortfall from 2006 after my house was repossessed by Natwest. As a mortgage shortfall stays on file for 12 years, I decided to make a Full and Final settlement offer in January this year which they accepted and which has now been paid. Now with both Equifax and Experian, the account has disappeared, it doesn't appear in my open or closed accounts. … [Read more...]
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