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...]
Find out what's new and what's changing in the debt world in Britain.
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...]
FCA’s consultation on home-collected credit, catalogue credit & store cards
This article has my proposed responses to some of the FCA's questions in its Consultation on High Cost Credit 18/12. I'll be sending them in next week. (My comments on the two FCA questions with an earlier deadline are here: Introducing a cap on the cost of Rent To Own lenders such as Brighthouse.) Rent to own Q3: Do you agree with our proposals for a point of sale ban on extended … [Read more...]
The Money Shop stops lending
On 1st August 2018, the Money Shop stopped giving loans to new or existing customers. Here is the announcement on its website: The Money Shop is part of the Dollar Financial group, who owned two other large payday lending brands, Payday UK and Payday Express. These both stopped lending in October 2017. The Money Shop is not going out of business, it is carrying on with its other travel … [Read more...]
Payday loan refunds push Wonga to brink of insolvency
Update: 30 August - Wonga is now in administration. 26 August - new reports that Wonga is about to go into administration. Sky News reported on Saturday August 4th 2018 that Wonga has received an emergency £10million cash injection to save it from insolvency. The latest fundraising is said to value the company at only $30m. Sky reports that Wonga's CEO, Tara Kneafsey, told … [Read more...]
Vanquis ROP (3) – refunds are too low – it’s time to complain
Have you had an email from Vanquis saying it is refunding you some money? Some people are being given tens of pounds when I think they should get hundreds. And people getting hundreds should be getting thousands! There were no details of the refund in the email sent to you, so there is no way for you to check it is accurate. In February, the FCA told Vanquis to give refunds to a million … [Read more...]
Current debt-related consultations eg from FCA
There are often a lot of consultations underway that are related to debt or debt advice matters. Few people in the debt advice world have time to respond to them all, but here is my list of the interesting ones, in order of the Closing Date. The brief summary of each consultation is mine, reflecting what I think are the most important areas. I try to keep it up-to-date. When a consultation … [Read more...]
Introducing a cap on the cost of Rent To Own lenders such as Brighthouse
The FCA's Consultation on High Cost Credit 18/12 is clear about the harm caused by Brighthouse and other rent-to-own (RTO) lenders: Our findings make clear that the costs of RTO are high, sometimes exceptionally so. RTO users are paying an average premium of 3 or 4 times the typical retail price of goods. At the extreme, this can be nearly 5 or 6 times ... We think it is highly likely that harm … [Read more...]
Rolling out a Universal Disaster – it’s time to stop
Today the National Audit Office has published Rolling out Universal Credit. This is the NAO's first report on Universal Credit (UC) since 2014. It makes grim reading for everyone: the DWP; taxpayers who are funding a huge bill for changes which may not achieve any useful purpose; local authorities, housing associations, food banks, benefits and debt advisers who are having to support … [Read more...]
News snippets about high cost credit
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. The latest FCA High Cost Credit Review reports in June 2018 covered many of the different types of lending covered on this page (with the regrettable exceptions of guarantor loans and … [Read more...]
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