Complaint Data March 2016 to 2017, Payday Loans

A view of the homepage of payday lender Wonga's website, which reported declining profits as it counts the cost of a ride to clean up the company's image.

Wonga is a payday loan company.

Nick Ansell Archives PA / Images PA

Complaints about payday loans – short-term loans with high interest rates – have tripled in the past year because of their ease of obtaining.

An annual report from the Financial Ombudsman Service, more commonly known as the Mediator, said cPayday loan complaints tripled between March 2016 and 2017, as more consumers accessed credit and took on debt, from 3,216 to 10,529.

The FOS is an independent body that provides dispute resolution for the UK’s largest sectors.

Meanwhile, general credit complaints have increased by 90%.

Payday loans charge high interest payments, usually made in a single payment, for people who borrow money on a short term basis. The Ombudsman’s report indicates that the increase in the number of consumers struggling with credit is the most “striking” change during the year, and underlines easier access to credit as well as a growing awareness of consumers to their rights in the face of increasing complaints.

  • 59% of payday loan complaints were found in favor of the consumer.
  • This compares to an overall success rate of 43% for all complaints.

Bank of England figures from January 2017 show that unsecured debt – or debt that is not protected by a guarantor – is at its highest level since the 2008 financial crisis. The Ombudsman said this indicated that a greater number of consumers are in potentially vulnerable positions.

In total, the watchdog received more than a million complaints during the year, the majority of which were against banks.

About Walter J. Leslie

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