Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Be aware of rip-off payday middlemen
Reading Time: 2 minutesThe ombudsman today has re-emphasised its warning to people seeking payday loans to be aware and vigilant of unscrupulous credit brokers and payday middlemen.
This comes after numerous people have complained to banks that they have been unfairly treated by brokers who have debited their accounts without their consent and without providing them with the loan they desired. In such cases credit brokers are misleading people, charging them for their services without providing them with a loan.
The ombudsman has announced that since April 2014 a staggering 11,500 people have made contact with the ombudsman to express their concerns and complain about credit broking websites.
Additionally, in two-thirds of cases investigated, the ombudsman has declared that consumers were treated unfairly and unethically. In the majority of cases the consumers were refunded as soon as the ombudsman intervened.
It has been revealed that a lot of people using these websites believed they were applying for a loan directly and were unaware that they had to pay middlemen, without ever getting the loan.
Senior ombudsman Juliana Francis said: “It’s disappointing to see that more and more people are being misled into thinking that these credit broking websites will get them a loan. In too many of the cases we sort out, no loan is provided and people’s bank accounts have been charged a high fee, often multiple times”.
The ombudsman has reassured people that their services are there to help immediately for anyone who has had their accounts charged unreasonably or without warning. They urge consumers having difficulties with credit brokers to contact them as soon as possible as this problem is becoming far too common.
In some of the worst cases consumers’ accounts were debited repeatedly without warning after their personal details had been passed on to other credit broking websites.
The ombudsman also revealed that recurring themes in consumer complaints involved consumers not giving permission for a charge to be made. This shows that the facts and rules of these credit broking businesses are highly evasive.
The ombudsman has launched a new webpage to help consumers overcome their payday lending concerns.
If you are experiencing similar issues and concerns contact the ombudsman: 0800 0234 567
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