Short term loans, payday loans and “credit brokers”

Short term loans, payday loans and credit brokers or, rather, credit breakers!

It looks like business, but it is a big fat con right there on your computer screen. It is so ridiculously blatantly bad that the Payday guys are ready to throw a few punches. They call themselves Credit Brokers, and are so suave and saucy that you are so blissfully unaware as you apply that this is actually no payday site. Worse than that, they have an awfully bad habit of selling your bank details to all and sundry so that you end up with a myriad of charges on your statement that you have no recollection of. No recollection, because you actually never charged anything.

Credit Brokers, or any broker, in theory is there to broker a deal for you. In other words, a broker is supposed to check out all the options and find the most expedient and of course the cheapest solution to cover your needs. In this case it would be a loan of some sort. A loan that is fast, cheap, short term, and reliable. Unfortunately brokers seem to be breaking their promises. The complaints pouring in all bear the same grievance. That the Brokers want to be paid up front for deals that they have yet to broker.

According to the Office of Fair Trading (OFT) there are standards that Credit Brokers are required to follow. Not only must they answer to the OFT but Brokers must also make clear to their consumers to following:

  • Their rights, and make clear and transparent their status as a Broker
  • That the customer has the right to a refund should the loan not be approved

Statistics are somewhat dismal. In the past 2 years the Helpline Consumer Direct has logged over 6114 complaints and in general, 70% of the cases where the Ombudsman became involved were ruled in favor of the consumer.

What can be most misleading about Brokers is that they aren’t often clear about who they are, exactly. Although Brokers are supposed to help people find the best value for their money, according to the Financial Ombudsman Service (FOS) many of these Brokers disguise themselves, and payday lenders is one of their best costumes. People think they are talking to someone at a payday firm and give up their bank details. The Brokers slap them with hefty fees, even if the loan does not come through, and in some cases even pass the bank details on to a third party. One person, who would rather not be named, ended up with over 700 pounds withdrawn from the bank, without any authorization other that that first Credit Broker. The Credit Broker that was thought to be a Payday Company.

Payday Lenders are still blamed for many of the financial predicaments that the country faces today, and at the same time have managed to exonerate themselves from taking the blame from many of the same too, this is not another that they need to take on. In fact this is solely one more financial entity that feels it can take advantage of a population desperately in need.