Payday lenders irresponsible and unsympathetic
A survey from the national charity revealed over eight in 10 of customers said lenders neither treated them sympathetically nor offered them any support when they ran into difficulty. Indeed, 84% failed to freeze interest payments and just 9% told customers where they could get debt free help.
The findings are taken from customer feedback on over 4,000 payday loans from more than 100 different payday lenders from November 2012 to 2013.
Gillian Guy, chief executive of national charity Citizens Advice, said: “Lenders’ failure to check a customer’s ability to pay back money traps people in a cycle of debt and leaves borrowers struggling with loan repayments they can’t afford to pay off.
“We help clients who have been harassed at home and at work by lenders or who are struggling with unmanageable repayments despite attempts to sort out their debts. Some people have found themselves without money to get to work or put food on the table after a payday lender used a Continuous Payment Authority to drain their bank accounts out of the blue.”
The national charity welcomes news that the Financial Conduct Authority will investigate the industry’s debt collection practices.
Guy added: “Launching the review on the first day that they take over new powers shows that the FCA shares our concerns over the risk these practices pose to consumers, and we will be working with them to share our evidence and make sure that consumers are protected.
“The FCA is right to ramp up pressure on lenders who exploit people’s money problems and must turn this into tough consequences where they find instances of unfair and bulling debt collection.”