The Telegraph are reporting that despite renewed vigilance of the payday loans industry, there remain significant issues with the way those organisations go about lending and collecting money:
“Four in 10 people who are rejected for a payday loan turned to another short-term lender, according to a new survey that highlights the high level of demand for quick money but the huge difference in affordability checks.
Payday loan companies have come under increased scrutiny from the Financial Conduct Authority (FCA) in recent months, with tighter rules on fees and a new registration process for all lenders coming into force next year.
However, a poll conducted in August and released on Wednesday found that 42pc of people turned down for a short-term loan managed to get into debt with another lender. A quarter of people turned down for a payday loan turned to family and friends for cash, while 27pc ended up defaulting on another loan or bill, the survey found.
The poll was carried out online by YouGov on behalf of the Consumer Finance Association (CFA), the trade body for eight short-term lenders including Cash Converters, the Money Shop and QuickQuid. YouGov contacted 40,000 people who had been recently rejected for a loan, and 720 people completed the survey.
Four percent of these people admitted to taking money from an unlicensed lender after they were rejected, and 2pc went into debt with a credit union. More than three-quarters did not know whether their lender was licenced, and 33pc said they had considered borrowing from an unlicensed lender after they were rejected by the major payday loans firms”.
Here at Ethicall we exist to support lending institutions not only to reconnect with non-paying customers, but also to help them make the right lending decisions. The FCA is clear that a lending decision cannot be made without a proper examination (including obtaining proof) of a customer’s ability to pay. The cost of sending one of Ethicall’s highly experienced field team to meet with a customer is surprisingly low, but what price can you put on developing that face to face relationship right at the outset? Whether it’s a payday loan, or a personal loan or a homeowner loan – give Geoff Poundes a call on 07515 286863 or email him at firstname.lastname@example.org and we’ll discuss how we can make Ethicall work for you.