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How to Pick a Payday Loans Company You Can Trust

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The Financial Ombudsman has issued another warning reminding consumers who are looking to borrow money by means of a short term loan to be very careful.

This comes in light of a recent statement by NatWest saying they are now receiving hundreds of complaints about these types of loans daily.

Pay Day loans

The bank is calling for the Financial Conduct Authority (FCA) to do more to protect the vulnerable who are being preyed upon.

Brokers and Middlemen

The payday online brokers and so called ‘payday middlemen’ are the ones being targeted as the main culprits for exercising these procedures that is causing such distress. They are being accused of dipping into unsuspecting people’s accounts in order to withdraw various sums of money without any authorisation.

But should all such companies now be tarred with the same brush?

What separates a payday loans company that has ethical practices from one that lacks integrity?

Authorised Licence

All lenders, online brokers and ‘middlemen’ require a consumer credit licence (CCL) to trade legally. CCL’s were originally given by the Office of Fair Trading (OFT) who were the financial regulator for the financial market up until 1st April 2014.

The FCA took over as watchdog on this date and it is now a legal requirement that anyone trading online in this particular sector must be in possession of an interim permission number supplied by the new regulator.

Many payday loan providers use a high tech system that allows the applicant to fill in their details in a quick and simple format before pressing submit.

The applicant’s personal details should not be stored by the provider to protect the customer’s security and they are then instantly transferred onto a real time system where lenders view the potential borrower before deciding if the applicant’s criteria meet the requirements before offering them the loan.

The whole process takes a matter of minutes and is meant to be completely transparent for the consumer so they are able to check out all the loan details before signing up for the loan application.

Are the fees hidden?

In certain circumstances if the lender feels that the borrower is a high risk, the lender may require extra fees as a safeguard. However, this should be made clear and concise to the applicant before completing the loan process.

If a payday loan provider displays clearly that they do not charge any fees for matching the borrower up with the lender or shows a ‘Free Loan Matching Service’, they should not grab any extra charges from the applicant. The provider should certainly not have any powers that would allow them to delve into any person’s account.

Nowadays with the internet being such a major part of how we buy so many things to save time in the comfort of our own space, internet fraud is becoming more prevalent. It is not just payday loans that a consumer needs to be vigilant about, but any type of online shopping when supplying any type of financial information.

PaydayLoan123’s advice would be: when applying for a short term loan, stick to a company name that is familiar to you and you trust, as opposed to a name of a site that has just popped up out of nowhere. 

About the author

Peter Davis Peter Davis is a Marketing Analyst at PaydayLoan123 specialising in financial products. Peter writes most of our articles as he stays up to date with the latest information. He enjoys most sports, particularly playing football and watching his favourite football team. Peter really like his food too as we have all witnessed first hand!

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