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FOS warns on payday loan brokers

Almost 11,000 consumers have made complaints to the Financial Ombudsman Service about payday loan brokers, data from the FOS reveals.

The FOS says so far this year, 10,895 consumers complained about payday loan brokers to the FOS, more than double the 4,726 that complained during the whole of last year. 

Complaints were upheld in 63 per cent of cases.

The FOS says in some of the worst cases, consumers saw their bank accounts debited multiple times without warning, with their details passed to other credit broking sites.

Many complainants thought they were applying for a loan directly and did not realise they were paying a middleman.

Common complaints were that consumers did not understand the payday loan broker would take a fee; that they did not agree to money being taken; and that they misunderstood that payments were towards loans rather than going to the broker.

Senior ombudsman Juliana Francis says: “It’s disappointing that people who are already struggling to make ends meet are being misled into thinking these websites will get them a loan.

“In too many of the cases we sort out, no loan is provided and people’s bank accounts have been charged a high fee, often multiple times.”

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