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...]
Debt policy & news
Debt Camel articles on what's changing and what ought to change in the world of personal debt in Britain.
For my weekly round-ups of debt and poverty news items, see Weekly News Summaries.
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...]
Debt News – October 14
Lots of Universal credit and benefit related articles this week as campaigners hope to force improvements in the autumn budget. My two top picks: Universal credit: who gains, who loses, and how does transitional protection really work? and Universal Credit and patterns of earning. Tweet of the week The Chancellor has one last chance to end the benefit freeze in his Autumn Budget, says … [Read more...]
Support for Mortgage Interest (SMI) is now a loan – should you agree to this?
Support for Mortgage Interest (SMI) helps people with the cost of their mortgage if they aren't working. It has been paid as a benefit since 1948, but in April 2018 this changed and now it is only given as a loan that is secured on your house. Here is the DWP leaflet describing the new loan: DWP SMI Factsheet (6 April). You may see LMI (loans for Morgage Interest) used as the new name for this, … [Read more...]
FCA warns “Debt Packagers” about poor debt advice to enter IVAs
On 5 October, the FCA wrote a Dear CEO letter saying: We have undertaken a review of a small sample of debt advice provided by Debt Packager firms and are very concerned about the poor standards we have seen... The FCA then asks the CEO to review: your quality of debt advice; the firm’s identification and treatment of vulnerable customers; financial promotions, and systems and … [Read more...]
Ombudsman decisions on payday loans over 6 years old
The Financial Ombudsman (FOS) has published 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 (often referred to as ‘payday’) from Lender D between November 2009 and July 2012. In each case, FOS has decided that its rules allow … [Read more...]
It’s wrong for Vanquis to profit from delaying ROP refunds
In February the FCA ordered Vanquis to refund £168m to customers using its ROP product, because Vanquis had not explained the additional interest people were being charged. At that point, Vanquis said it would refund customers with open Vanquis accounts within three months. In June, Vanquis gave up on that three-month target and said it hoped to refund people with open accounts by the end of … [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...]
QuickQuid complaints triple – now more than Barclays or Wonga
Today's statistics from the Finanical Ombudsman show how the number of payday loan complaints has jumped in the last 6 months: complaint numbers for QuickQuid have tripled since the last half of 2017 Wonga's complaints nearly doubled, forcing it to go into administration at the end of August other payday lenders such as Lending Stream, Sunny and Payday UK have also seen numbers of … [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...]
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