Published on June 26th, 2014 | by FinanceLoophole3
Don’t pay charges and interest on your payday loans read our free guide
Lots of people take out payday loans from companies such as Wonga, WizzCash, QuickQuid and Peachy etc. They are easy to get but not that easy to repay at times especially when the interest and charges build up. These can drive consumers into debts that can spiral out of proportion to the origional loan, making it especially difficult for them when their funds are already limited.
It is at the point when your repayments are mounting up and becoming unafordable and increasingly difficult that the payday lender will become unecessarily unfair. Pilling more interest on and adding more charges which can opften add up to 60% of the loan on top of what you already owe them. It’s a nightmare!
By doing this it all indicates that the lender has not taken adequate precautions to fulfil it’s duty as a responsible lender under the consumer credit act.
To begin trading as a payday loan company they have to obtain a consumer credit licence, which gives a whole list of guidelines the company has to follow by law. These laws are there to protect you as a consumer. This means that payday loan companies have to listen to the consumer, especially if they are entering financial hardship and simply have no means to pay back the loan.
In 2013 The Office of Fair Trading found that many of these payday loan companies were failing in their duty as lenders and not complying with the consumer credit law. It is widespread and common for lenders to hand out loans without properly assessing the ability of a customer to repay the loan in the first place. Twinned with burying the terms and conditions and the true cost of repayment of the loan to the customer. If add the charges and interest incurred over a few weeks or months onto the original repayments, you can see where a lot of consumers fail to repay and end up getting more in debt.
So! – how can I get out of paying the payday loan charges and interest they want?
The obvious argument –
- You have fallen into debt and owe this extra interest and charges because the payday loan company missold you the loan in the first place beacuse they did not asses your abiltiy to repay correctly.
- You have been ammasing debt from the repayment of the payday loan becasue they did not inform you at the outset of the full cost of the loan.
Don’t waste your time trying to call them, this can lead to more frustration and stress and could increase your phone bills. You probabaly won’t get to the person you need to speak to who can authorise a change to your repayment and/or interest charges. Put it all down in writing and send it to them by recorded delivery post. You can use some of our templates to do this – change them as requierd to reflect your specific circumstances.
Tell them why you think you were missold and that your efforts to seek assistance from them to repay the outstanding loan has resulted in little or no help.Consumer credit laws tell them that they are obliged to listen to your case and help you out of your current situation with them. You need to also tell them about your current finacial situation so they can see that you have no way of payiong back the amount still outstanding.
They have to consider your letter and they have got 8 weeks to respond to you. If they dont hen you can rasie your problem with the Finacial Ombudsman for them to pursue the matter for you. The Finacial Ombudsman can also decide if you were unfairly treated and could award damages to you.
Payday loan companies are still in 2014 guilty of even the most flagrant misconduct. This has happened to Wonga (June 2014) one of the largest UK Payday lenders – and The Financial Conduct Authority (FCA) said Wonga had been guilty of “unfair and misleading debt collection practices” and it had ordered the firm to pay more than £2.6m compensation. So there is every possibility that if you take the correct action you can prevent your overpayments you cannot afford.