This page brings together news items about various types of high-cost lending in Britain, including payday loans, guarantor loans, doorstep lending, logbook loans, rent to own and other forms of high-cost credit. In December 2018 the FCA has responded to consultation responses on high cost credit and overdrafts. Good to see a major change to what they are proposing for BNPL deals, see below. … [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.
On 30 August, Wonga stopped lending and went into administration. At that date: there were over 200,000 people with current loans from Wonga - many of them may have a good case for the interest to be removed from their balance so they only repay what they borrowed; there were 24,000 affordability complaints awaiting a decision by Wonga and 9,500 complaints against Wonga with the Financial … [Read more...]
The Wonga administrators sent a letter, with voting forms, last week to Wonga creditors. These creditors include some people who have made payday loan affordability complaints as they are owed money by Wonga. Customers who have commented on my Wonga Refunds - Latest news page have said things like It's very confusing or I can't make head or tail of it. And above all Do we need to do … [Read more...]
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...]
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...]
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...]
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...]
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 (often referred to as ‘payday’) from Lender D between November 2009 and July 2012. In both cases FOS has decided that … [Read more...]
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...]
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...]