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Beware of online loan brokers


Consumers are being warned about “rip off” websites for online loan brokers, who offer to find people the best pay day loan, but end up taking money without the consumers permission, and sometimes don’t even provide a loan.

The pay day loan middlemen advertise that they will find the consumer the best loan offer, but charge a fee of £50 to £75 to do this, which can sometimes be levied up to three or four times. The Financial Conduct Authority (FCA) is now looking closely at such activities, and the Financial Ombudsman has warned consumers to stay vigilant. It said it had received 11,500 complaints about "rip-off" loan brokers since April, more than double the number in the whole of last year.

Natwest have reported receiving up to 640 complaints a day about these companies, and are worried they might increase on the run up to Christmas. The bank has called for further regulations from the FCA.

Terry Lawson, Head of fraud and chargeback operations at RBS and NatWest said:
“These are sophisticated organisations. They are resourceful, and more needs to be done at an industry and regulator level to protect customers who may already be in vulnerable situations"

The Competition and Markets Authority (CMA) would like to see brokers and lead generators become more clear on their websites. They would like the companies to make it clear to consumers that the are not a “lender”. They also want consumers to be aware that they may not find the cheapest loan for them as many companies sell their details to the highest bidder.

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