The Financial Ombudsman won’t look at complaints about two payday lenders, Swift Sterling and Pounds Till Payday, because these are not UK firms regulated by the Financial Conduct Authority.
Swift Sterling, Pounds Till Payday and My Money Partner were trading names of Northway Financial Corporation Limited, a Maltese company.
Can you get a payday loan refund? looks at how to complain to a UK regulated payday lender if you were given an “unaffordable” payday loan. But that article and its template letters don’t apply to these two Malta-based payday lenders, so this article looks at what your options are.
What has happened since this article was first published
- December 2015 – the websites and brand names were bought by an FCA-authorised UK company, MMP Financial Ltd.
- January 2016 – the Financial Ombudsman said the MMP take over hasn’t made a difference to complaints about previous loans from Swift Sterling and Pounds Till Payday, and these complaints have to be made to the Maltese regulator, not in the UK.
- After this, people started complaining to the Malta Financial Services Authority (MFSA). There are lots of comments at the bottom of this article about this.
- May 2016 – the MFSA ordered Northway, the lenders’ parent company to refund interest for a few readers who then received cheques.
- the Consumer Complaints Unit within the MFSA is being phased out and replaced by the Office of the Arbiter for Financial Services.
- November 2016 – the FCA is making MMF, the debt collector that has bought many Swift Sterling and Pounds Till Payday debts, refund many customers for its poor debt collection practices, see the bottom of this article.
- December 2016 – Northway has offered to pay some compensation to some more customers.
- April 2017 – the MFSA has told people with active cases that they have been closed and complainants have to go to the Office of the Arbiter for Financial Services. This will feel like more bad news and delays, but apparently the Office of the Arbiter can issue binding rulings in relation to complaints. So hopefully Northway won’t just ignore these decisions as they have been ignoring MFSA decisions. I don’t know how you can enforce a binding ruling in Malta
For the latest on what is happening, see the Comments section at the bottom of this article.
Why can’t you take these complaints to the Financial Ombudsman?
Both Swift Sterling’s and Pounds Till Payday’s websites said in their Complaints Procedures:
“At this stage, if you are dissatisfied with the delay or we have not been able to sort out your complaint to your satisfaction, you can escalate your complaint to an external body (see below).
Step 3 – If you remain dissatisfied
It is important that you give us the opportunity of addressing your concerns first before escalating your complaint as they will only consider your complaint after we have had the opportunity to sort out the matter under our internal complaints process.
You may ask the Financial Ombudsman Service to review your complaint. You should contact the Financial Ombudsman Service within 6 months of receiving our final response letter. Their details are below: [full address and email details for the UK Financial Ombudsman]”
One reader has received the following reply from the Financial Ombudsman:
“Unfortunately Pounds till Payday don’t have offices in the UK and as a result we are still unable to look at complaints about them. As you said below, their offices are based in Malta and they are regulated by the Malta Financial Services Authority. I’m sorry their website seems to suggest otherwise.
Thank you for sending me the page on their website which specifically directs people to bring their complaints to us … I have spoken to a colleague and we are going to contact Pounds till Payday to ask them amend this. I agree this is misleading borrowers.“
(The websites have now been changed, but here is a snapshot taken in November 2015.)
So if you wanted to complain that one of these lenders gave you a loan that was unaffordable, you have to go through the Maltese regulators, not UK processes.
You may think this is never going to work… But if you read the comments below you will see that several readers have managed to refunds – some of them large – after going through the lengthy process of appealing to Northway (Swift Sterling and Pounds Till Payday’s parent company) and then the Maltese regulator. It has taken many months but with perseverance you may get a good result.
Did Northway really think the Financial Ombudsman will look at these complaints? Or were these incorrect complaints procedures included on the two websites to give the appearance of respectability by suggesting that the payday lender was subject to some UK regulation?
In the USA, Northway is being sued by the Consumer Financial Protection Bureau which alleges it is part of a group of payday lenders that:
- made false threats to consumers;
- deceived consumers about their debts; and
- used illegal wage-assignment clauses:
Has your debt been sold to MotorMile Finance?
Swift Sterling and Pounds Till Payday have sold many defaulted debts to the UK debt collector MotorMile Finance (MMF). In November 2016 the FCA has made MMF offer a redress package to many customers because of poor way it has handled debt recovery, so if your debt is now with MMF, read MMF – can you get a write off or a refund?
Claims against MMF can only relate to the defaulted debts sold to them. You may still have additional claims against Swift Sterling and Pounds Till Payday for “affordability” problems. Additionally putting in an affordability complaint to the original lender should mean that a debt collector puts a hold on any debt enforcement such as taking you to court for a CCJ whilst the dispute about the original debt is resolved.