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Easy access to credit prompts a trebling in complaints against payday loans

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Easy access to credit prompts a trebling in complaints against payday loans

A view of the home website page the payday lender Wonga, which has reported a slump in profits as it counts the cost of a drive to clean up the image of the business.

Nick Ansell PA Archive/PA Images

Wonga is a payday loan company.

The easiness of getting payday loans — short term loans that carry high interest rates — is the reason behind complaints about this product tripling over the last year.

The Financial Ombudsman Service is an independent body which provides dispute resolution for the UK’s largest sectors. 

In its annual report, FOS or more commonly known as the Ombudsman, said complaints against payday loans trebled between March 2016 and 2017, as higher numbers of consumers had access to credit and fell into debt — from 3,216 to 10,529.

Meanwhile general complaints about credit rose by 90%.

Payday loans charge high-interest repayments, usually made in just one instalment, for people borrowing money in the short term. The Ombudsman’s report says the rise in the number of consumers struggling with credit is the most “striking” change over the year, and points to easier access to credit as well as growing consumer awareness about their rights for the rise in complaints. 

  • 59% of complaints about payday loans were ruled in the consumer’s favour.
  • That compares to a general success rate of 43% across 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 pointed to this as an indication that higher numbers of consumers are in potentially vulnerable positions. 

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

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A view of the home website page the payday lender Wonga, which has reported a slump in profits as it counts the cost of a drive to clean up the image of the business.

Nick Ansell PA Archive/PA Images

Wonga is a payday loan company.

The easiness of getting payday loans — short term loans that carry high interest rates — is the reason behind complaints about this product tripling over the last year.

The Financial Ombudsman Service is an independent body which provides dispute resolution for the UK’s largest sectors. 

In its annual report, FOS or more commonly known as the Ombudsman, said complaints against payday loans trebled between March 2016 and 2017, as higher numbers of consumers had access to credit and fell into debt — from 3,216 to 10,529.

Meanwhile general complaints about credit rose by 90%.

Payday loans charge high-interest repayments, usually made in just one instalment, for people borrowing money in the short term. The Ombudsman’s report says the rise in the number of consumers struggling with credit is the most “striking” change over the year, and points to easier access to credit as well as growing consumer awareness about their rights for the rise in complaints. 

  • 59% of complaints about payday loans were ruled in the consumer’s favour.
  • That compares to a general success rate of 43% across 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 pointed to this as an indication that higher numbers of consumers are in potentially vulnerable positions. 

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

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Please enable Javascript to watch this video

Read more stories on Business Insider, Malaysian edition of the world’s fastest-growing business and technology news website.



✍ Sumber Pautan : ☕ Business InsiderBusiness Insider

Kredit kepada pemilik laman asal dan sekira berminat untuk meneruskan bacaan sila klik link atau copy paste ke web server : http://ift.tt/2rqzVvA

(✿◠‿◠)✌ Mukah Pages : Pautan Viral Media Sensasi Tanpa Henti. Memuat-naik beraneka jenis artikel menarik setiap detik tanpa henti dari pelbagai sumber. Selamat membaca dan jangan lupa untuk 👍 Like & 💕 Share di media sosial anda!



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