It is March 2015; the problems should be sorted out, but the payday lenders are still being harassed

The FCA (Financial Conduct Authority) is still complaining that customers in arrears are still not being treated fairly by payday lenders. The particular regulator that took over from the CMA (Competition Markets Authority) in early 2014 alleges that it has found: “Serious non-compliance and unfair practices” in all the lending companies that they examined. As part of the investigation, the FCA found that some companies were found committing misdemeanours. The FCA has focused its investigation on making sure that:

  • The payday lenders take the time to recognise and be sympathetic to the difficulties of their customers.
  • That the payday lenders take the time to counsel their customers and help them in the right direction towards good free debt advice.
  • That payday lenders should investigate all their consumer complaints thoroughly.
  • That payday lenders should never mislead their customers for their gain.
  • That the payday lender never adds fees or charges to bills unless they are transparent about it.

Payday lenders are still being harassed by authorities, despite complying with the new regulations of 2015. It is no secret that after the cap came into pace in January, there were several payday companies that shut up shop and left the high street. It is understandable that it is these kinds of businesses that we want to move out of the communities all across the UK. The cap was in a way a sort of testing ground and the companies that made the grade can now be taken as legitimate. Why are payday lenders still being harassed?

Payday companies vs. Banks: Why are payday lenders still being harassed?

Why are payday lenders still being harassed?  That is an interesting question. Here are the issues that were a big problem before January 2015:

  • There needed to be a cap on the interest rate
  • There needed to be cross checks between payday lenders to make sure that a person didn’t have many loans
  • There had to be a comprehensive credit check to make sure the person didn’t have lots of debts. 

These are very important issues and probably the same as your bank would go through before offering you a loan. Here is what your bank, building society, or credit union would NOT do:

  • The banks, etc. would not take the time to recognise and be sympathetic to the difficulties of their customers.
  • The banks, etc. would not take the time to counsel their customers and help them in the right direction towards good free debt advice.
  • That the banks, etc. would try hard to never mislead their customers for their own gain.
  • That the banks, etc. would never add fees or charges to bills unless they are transparent about it.

This is by no means an accusation. It would just be interesting if the FCA, the CMA, and the Ombudsman would check it out.