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Payday Loans Receive More Bad Press

Written By On 05/08/2013

As Payday Loan 123 reported back in May, the Citizens Advice Bureau looked into several cases of allegations against the behaviour of payday lenders. They now believe that out of nearly seven hundred complaints that they looked into, just over three quarters of them have good reason to take their issue further. They are advising the citizens concerned to report their concerns to the Financial Ombudsman Service.

An extremely worrying element that reared it's ugly head, was that approximately twenty per cent of the allegations appear to have been fraudulent, because repayments were being asked from companies for loans that were never even applied for.

Another major concern was more than thirty per cent of the other cases reported say lenders had taken funds out of customers' accounts, without giving them any notice of it happening. Apparently over one in ten of the cases commented that lenders harassed them to repay the complete loan amount, and not willing to negotiate something more affordable for the borrower.

A spokesperson for the charity said,

If you are struggling to pay back the loan, Citizens Advice can help you sort out a reasonable repayment plan.

The organisation advises lenders to behave more responsibly. They ask for some empathy and integrity instead of pestering their customers twenty four hours a day or contacting their employers to put extra pressure on them. They feel that the lenders concerned should accept a suitable repayment strategy that works for both sides.

They tell the borrowers concerned to speak to their lenders primarily, but if it cannot get sorted, then report your problem to the ombudsman. They will try and settle the situation and have certain authority that can help the customer if need be. They say that in most cases they are confident that a particular lender would empathise and work to resolve the issue, without blaming the borrower.

As we said a few weeks ago in our article Some Lenders Leave the Market the deadline from the Office of Fair Trading has elapsed for lenders to get their act together. Thirty per cent of the fifty lenders that were contacted have now decided to cease trading for payday loans.