Complaints against Payday Loan Companies Reaches Five Year High
According to the industry watchdog, complaints made against Payday loan providers has reached a five year high.
The Financial Ombudsmen service has reported that there were almost 40,000 complaints made last year compared with 17,000 during the previous year i.e. an increase of 130%, reflecting the increasing number of people left to “struggle with debt”.
The Consumer Finance Association (“CFA”) said that many of the complaints were made via claims management companies with the majority of complaints being about affordability.
It is reported that some customers have taken out between 20 and 30 Payday loans in order to service existing debts or to pay general household bills.
The CFA spokesperson has stated that “These figures show a deeply disappointing increase, driven by a flood from claims management companies and we continue to see many a complaint that has no foundation”.
“Now nearly nine in 10 of complaints to firms are generated by these companies. The complaints are often of poor quality.”