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Payday lender complaints to FOS rocket 75%

The Financial Ombudsman Service says it has seen a 75 per cent year-on-year increase in complaints about payday lenders and is finding in consumers’ favour in nearly three quarters of cases.

FOS says it receives 30 to 40 complaints each month and many of the cases involve the lender’s use of a continuous payment authority, which allows lenders to collect payments directly from a consumer’s bank account.

It has seen a number of payday loan complaints from consumers who say they never even took out the loan in question and it is also coming across situations where fraudsters took out loans in other people’s names.

The latest issue of Ombudsman News says: “Typical problems involve payday lenders trying to take payments unexpectedly – or repeatedly attempting to take payments when the consumer has already explained that they don’t have enough money to cover the debt.

“We also see complaints about unaffordable lending and about the debt recovery methods used by some payday lenders.”

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