The Financial Ombudsman (FOS) complaint statistics for Oct-Dec 2019 have just been published, see Product Complaints Data. For guarantor loans, FOS decided in favour of the consumer in 90% of cases: this is even higher than the 83% that were won in April-Jun 2019. these figures are a dramatic increase from the uphold rate of only 32% for the 2018 financial year. This … [Read more...]
High cost credit news and policy
More payday lenders go under – was anything learned from Wonga?
In the last two months of 2019, Britain's largest payday lender, QuickQuid, went into administration followed by three smaller lenders: 247 Moneybox, PiggyBank and Swift Sterling. Have the lessons from Wonga's collapse last year been leaned? And how can regulators and debt advisers do better in future to protect borrowers, not just of payday loans but other sorts of high cost credit as … [Read more...]
Sunny’s payday lending – concerned about lack of regulatory clarity
In November 2019, many people hoping for a payday loan refund from Sunny were watching for the third-quarter results from Elevate, Sunny's US parent. Would Elevate decide to close Sunny, so they wouldn't get their refunds? In late October QuickQuid had gone into administration after its American parent announced it was exiting the UK. That left Lending Stream, Myjar and Sunny as the largest … [Read more...]
Money Shop – redundancy plans and stores closing
UPDATE - June 15th Money Shop to close – two million customers will be informed On June 21 the Daily Mail reported that : In a letter sent to employees and seen by This is Money, ICL said it plans to close or sell off all of its UK stores following 'poor financial performance' and an 'unprecedented number of customer complaints'. The Money Shop has already shut down or sold … [Read more...]
Payday lenders tired of having to pay so many refunds – unsurprising!
The Financial Ombudsman Service (FOS) published its Annual Review this week which highlighted the massive jump in payday loan complaints - up 130% to c.40,000 in 2018-19. The Consumer Finance Association (CFA) has responded with a blog "Reflecting on the FOS Annual Review". The CFA is the trade association for payday lenders, so you won't be surprised they are not happy... Mandy Rice-Davies's … [Read more...]
Guarantor loans – why guarantors & borrowers need extra protection
Guarantor loans are coming into the regulatory spotlight. The FCA wrote to CEOs in March 2019 saying it will be looking at affordability and whether potential guarantors have enough information to understand how likely it is that they may have to make the loan payments. In a speech, Jonathan Davis said: Recent work we have done in this area showed that many guarantors are making at least 1 … [Read more...]
2018 FOS statistics – most complaints about QuickQuid
New statistics for July-December 2018 from the Financial Ombudsman (FOS) show how payday loan complaints have jumped in the second half of 2018 and give details for how many complaints the larger lenders had. Almost all these cases are affordability complaints where a customer was given payday loans without proper affordability checks and is asking for a refund of interest paid. The … [Read more...]
Why is QuickQuid going to delete old customer data?
QuickQuid has told some customers that it plans to delete loan data over seven years old with effect from today, 15th April 2019. It says this is to comply with its legal obligations. QuickQuid has sent emails to the affected customers asking if they would like a copy of their data before it is deleted. It seems to me that this new policy is not in the customers' interest because it will … [Read more...]
How many Wonga victims are there? 10k, 40k? More!
In February, Nicky Morgan, who chairs the Treasury Committee, said: It cannot be right that over 10,000 people who may have been mis-sold loans are just cast aside, especially as many will be vulnerable consumers. The Wonga administrators replied, saying: The total number of redress claims is currently more than four times the number you referred to in your press statement on 26 February and we … [Read more...]
The FCA’s High Cost Credit supervision priorities
The FCA has published its Portfolio Strategy Letter to firms providing high cost lending. This was sent on 6 March to firms that provide: guarantor loans (eg Amigo) payday loans high-cost unsecured subprime loans home-collected credit (eg Provident) logbook loans pawn-broking rent-to-own (eg Brighthouse). This letter doesn’t cover overdrafts, subprime credit cards or … [Read more...]
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