Risk is inherent in any short-term loan, and payday loans are no exception. You need all the facts and assurances you can pay it back – short-term is the key here.
Some predatory payday lenders take advantage people in financial trouble. They leverage desperation to gain profit and throw ethics out the window. There are plenty of responsible lenders in the UK, but their businesses get tarnished by the low standards of others.
If you have a negative experience with a payday lender, reporting is a means of justice. You may be entitled to compensation and reporting it will help your legal cause. So how does one report a predatory payday lender? Here is a quick overview to help you.
Report Them to the Financial Conduct Authority
The best short-term loans companies are registered with the Financial Conduct Authority (FCA). This is a mark of compliance and professionalism. Even if a predatory lender is unregistered, you can still report them to FCA.
The UK reformed regulations around payday loans back in 2013. The FCA then imposed price cap rules to protect consumers. Before this, many predatory lenders added adding huge costs, confusing consumers and filling their own pockets.
Under FCA rules, a bank or lender must reply to your complaint within 8 weeks. Many have teams and protocols to handle complaints, but predatory lenders may lack the means for this. Even so, after filing our complain with the lender, the FCA is your next port of call.
Keep Cool and Gather Evidence
The FCA can advise you on what evidence you need. Even before contacting the lender, you can search your records. Look for all correspondence, marketing communications and legal paperwork.
Find evidence of your financial position before the loan and any damage you have suffered since. This can be financial, mental or physical suffering due to the loan. If you have seen a doctor for stress-related ailments, ask them for a report of this.
Type up a detailed letter of your complaint. Keep digital and paper copies for records. Make clear the reasons for your complaint, detailing the events leading up to your loan.
Avoid sharing any information online. We know that sounds obvious, but in the heat of the moment you may make mistakes. Keep it all confidential.
The same applies to criticizing the company online – even though you are entitled, unproven claims can provoke a defamation lawsuit, and social media is technically published content.
Contact the Financial Ombudsman
Once you have tried everything with the payday lender themselves, refer to the Financial Ombudsman (FOS). Send your evidence from before, during and after your complaint. Make clear that 8 weeks have passed without satisfactory reply.
Call (800) 342-3736 for free help in your language. If you need a document translated into your language, send an email to consumers@dfs.ny.gov.
You can also complain to the FOS if your card issuer failed to cancel a continuous payment authority. They have a duty to do this, so ask your bank where to direct FOS-related complaints.
Move On to a Brighter Financial Future
Despite governmental regulation of payday lenders, predatory firms still exist. In your desperation, you could turn to the wrong sources. But even then, the right help is still available.
Financial companies have a duty of care to their clients. If you find you have been taken advantage of, you should follow these steps. Resolution is closer than you think, so never give up!
