Qualified advisers answering your
Financial Questions
call 0800 092 1245

Payday loan middleman complaints double


Complaints from payday loan customers about credit broking services have doubled over the last 12 months, according to the Financial Ombudsman Service (FOS).

Credit broking websites are essentially middlemen between the payday loan company and the customer, and they are designed to help people find a loan that suits their needs.

However, these companies charge upfront broking or membership fees for their services, which can be as high as £100. The FOS said that in many cases, the customer was actually unaware that they were dealing with a ‘middleman’, and they actually thought the company was a payday loan provider.

Since January 2014 alone, over 10,000 people have contacted the FOS about credit brokers, with some claiming that they had money ‘drained’ from their bank account.

In the worst case scenarios, customers had money taken from their bank accounts but did not actually receive a loan. One person even had their bank details passed between 10 different websites who each charged £70, meaning £700 was taken from them.

Misleading vulnerable people

The FOS claimed that many of those affected by these companies are vulnerable people who are struggling financially. Additionally, these people are often misled, because they never actually receive the loan they needed in the first place, despite paying the up-front fees.

Juliana Francis, a senior ombudsman at the FOS said: "In too many of the cases we sort out, no loan is provided and people's bank accounts have been charged a high fee, often multiple times."

This led to debt charities such as StepChange, calling for the upfront fees to be made illegal.

Peter Tutton, head of policy at StepChange said: "This is a well-known problem, but it continues to get worse." He also claimed that "the time has come for government and the regulator to ban credit brokers from charging up-front fees."

However, when questioned about any plans to investigate the sector, the Financial Conduct Authority (FCA) would not comment, although they did confirm they are aware of the report.

Need financial Advice?

If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details