Sharp Rise in Debtor Complaints about Loan Brokers
December 4, 2014
A growing number of men and women in debt around the UK are seeing their financial difficulties added to by the interference of loan brokers, who in many cases take money directly from personal bank accounts without having provided any service whatsoever.
That’s according to a new set of figures on the subject compiled by the Citizens Advice Bureau (CAB), which provides guidance to people dealing with debt management issues in Scotland and the rest of the UK.
In fact, the charity describes its staff as having been “inundated with complaints” in recent months about supposed loan brokers who take cash from bank accounts despite never actually providing any sort of service or finding a loan for the individuals involved.
Describing the practice as “appalling”, the CAB has made clear that it wants to see the Financial Conduct Authority (FCA) clamp down on brokers who take money directly from personal bank accounts.
The issue has apparently emerged and affected hundreds of people in the UK this year, with the CAB saying the number of complaints on the subject it received between July and September amounting to a figure three-times higher than that recorded in the same period of 2013.
Gillian Guy, chief executive of Citizens Advice, explained that people whose financial positions are already difficult or even perilous are among those most likely to be impacted by the rogue behaviour of what are widely being seen as a new and unwelcome breed of loan broker.
“People who are desperate for credit are being pushed further into financial hardship through broken promises and unauthorised charges,” Guy said. “Some vulnerable customers are struggling to get to the next pay packet after being fleeced by these firms.”
“Our evidence shows on average people lost £118 in charges, rising to over £183 where more than one transaction is made. Only 3 per cent were actually offered loans or had details passed to a lender. In one case 19 different firms had taken money,” Guy said in a statement.
Summing up her own and the CAB’s general concerns, Guy said that data relating to would-be loan customers in the UK is being traded in worrying ways and many people who have had money taken from their accounts are struggling to get refunds or even to identify the companies responsible.
The market for loan brokers in the UK “needs a radical clean-up of bad practice,” she said.
Your personal credit score plays an important part in securing new loans and credit, and can affect your financial life for better or worse. Lenders use the information in your credit file to determine whether you present a high risk of default, and if your credit score is low, you may find it difficult to […]
Credit unions offer a range of financial products including current accounts, savings accounts, and loans, and can be a good alternative to banks and building societies whilst also helping your cash flow. There are credit unions all around the UK, almost 100 of them operating in Scotland. They’re not always widely advertised, however, and although […]
It’s a worrying situation when you realise your outgoings exceed your income, and it can be difficult to prevent debt in this situation, but there are solid steps you can take to get back on track – you just need to act quickly. Increasing your income or reducing the money going out are essentially what […]
If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work. As far as your old employment is concerned, it’s important that you check your final wage slip to […]
If you are a Scottish resident in financial difficulty, you may have entered into a Trust Deed in order to restructure debt repayments to creditors. A Trust Deed is a fixed voluntary agreement made between the debtor and creditor, with the help of a trustee. Debt is broken down into smaller, affordable instalments, typically lasting […]
A Debt Arrangement Scheme (DAS) is a government backed scheme which allows you to repay debt through contractual, monthly instalments without the threat of legal action and incurring penalties or interest. The scheme was established in 2004 for Scottish residents in debt, providing an alternative solution to sequestration, the Scottish equivalent of bankruptcy. A Debt […]