Payday lender complaints double
08 Jul 2014
According to a recent document published by the Financial Ombudsman, complaints about payday loans have more than doubled in the past two years.
The number of such complaints increased from 296 in 2012 to 794 in April 2014, although it is also suspected that many more people would have made complaints but felt powerless to act. The total number of inquiries made in that period was 5,395.
Each year an estimated £8 million short-term loans are taken out. The Financial Ombudsman said that many people struggle with repayments on these loans without speaking up because they are unaware that the ombudsman service exists.
Recently, the payday lender Wonga was ordered to pay over £2.6 million in compensation after sending threatening letters from non-existent law firms.
Principal ombudsman Caroline Wayman said: ‘We often hear from people who took out a payday loan as a desperate last resort and blame themselves when the debt starts to spiral out of control. It’s important that people don’t feel trapped with nowhere to turn because of the stigma associated with short-term lending’.