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The latest news on loans and lending:

December 17, 2012

Wonga launches Paylater loans on retailer website

by Jan Harris
Wonga launches Paylater loans on retailer website
Payday loan company Wonga has launched a new Paylater service on furniture firm Cotswold Company’s website. The service, which allows customers to "buy now, pay later" will be introduced on other retailers’ sites in the near future. Although the Paylater branding is similar to Wonga’s, the Wonga name only appears in the small print. A spokesman for Wonga said: ...




November 28, 2012

Interest to be capped on payday loans

by Jan Harris
Interest to be capped on payday loans
The government has agreed to give the incoming Financial Conduct Authority the power to take action against unscrupulous lenders. In the face of defeat on a proposed amendment to the Financial Services Bill it has also agreed to allow the interest rates charged for payday loans to be capped. The cross-party amendment was backed by Lord Mitchell, the incoming Archbishop of ...




November 26, 2012

Payday loan rules come into force

by Jan Harris
Payday loan rules come into force
A new code of practice for payday loan companies came fully into effect today. The code, devised by the Consumer Finance Association (CFA), is designed to curtail practices that could cause people to fall further into debt. People applying for a loan must be given clear information about the way a payday loan works and an example of the price for ...




November 20, 2012

OFT uncovers reckless lending by payday loan firms

by Jan Harris
OFT uncovers reckless lending by payday loan firms
The Office of Fair Trading (OFT) is formally investigating several payday loan companies due to concern over reckless lending and aggressive debt collection. The OFT has published its interim report into the payday loan industry, as part of an investigation which started in February. It found that most of the 50 firms investigated are failing to meet some of ...




November 13, 2012

50% increase in Brits turning to payday loans

by Jan Harris
50% increase in Brits turning to payday loans
Research by insolvency trade body R3 has revealed that the numbers of people turning to expensive payday loans to fund essentials is soaring. Five million Britons are planning to take out a payday loan within the next six months, R3 found, 50 per cent more than a year ago. A quarter of people aged between 18 and 24 years are ...




October 1, 2012

BBC documentary reveals payday loan concerns

by Jan Harris
BBC documentary reveals payday loan concerns
A documentary by the BBC, to be screened tonight, claims that payday loan company Provident Financial has made multiple loans to a vulnerable woman diagnosed with mental health problems. The Panorama documentary, Debt on the Doorstep, claims that Provident Financial loaned thousands of pounds to the woman, who has been diagnosed with schizophrenia. During the BBC’s undercover investigation into the company, an ...




September 17, 2012

Banks refusing to cancel pay-day loan payments

by Jan Harris
Banks refusing to cancel pay-day loan payments
The BBC has reported that some banks are refusing to cancel payments to payday loan companies when asked to do so by their customers. Bank customers have a legal right to cancel payments from their accounts under the 2009 Payment Services Directive. However some banks believe that they do not have to cancel certain types of payment. Speaking to Radio 4’s Money ...




September 12, 2012

One million people borrow to pay household bills

by Jan Harris
One million people borrow to pay household bills
One million people are turning to payday loans to pay their monthly bills and there are fears that the situation could worsen when Universal Credit is introduced next year. According to a new study by Santander more than one million people in the UK use payday loans to pay their household bills, despite the high levels of interest charged ...




August 9, 2012

Help Loan closed after breaching money-laundering rules

by Jan Harris
Help Loan closed after breaching money-laundering rules
Payday Loan company MCO Capital has been closed down by the Office of Fair Trading (OFT) and fined £544,000 after failing to check the identity of its borrowers. The firm, which traded as Help Loan, was targeted by criminals and cheated of more than £1.5m by the fraudsters due to its negligence. The criminals stole the identities of 7,000 people and used ...




July 25, 2012

Payday loan code falls short of expectations

by Jan Harris
Payday loan code falls short of expectations
A new code of practice for payday lenders has been launched but consumer groups say it amounts to mere rebranding and doesn’t go far enough to protect borrowers. The code was agreed following lengthy negotiations between the payday loan industry and government. Four trade bodies - the Consumer Finance Association, the British Cheque and Credit Association, the Consumer Credit Trade ...




July 24, 2012

Jobless need protection from payday loans, charity says

by Jan Harris
Jobless need protection from payday loans, charity says
Prior to the Payday loan industry’s launch of a new code of conduct this week, the Consumer Credit Counselling Service (CCCS) is calling for more protection for the unemployed. The charity warns that the number of jobless people struggling to repay short-term, high-interest payday loans is increasing. It wants the payday loan industry to ensure that affordability checks are carried ...




July 5, 2012

Shopacheck fined £150,000 for losing customer data

by Jan Harris
Shopacheck fined £150,000 for losing customer data
Welcome Financial Services has been fined £150,000 for losing tapes containing details of loans made to 510,000 customers of its Shopacheck service. Shopacheck offers loans to people with a low credit rating, often at an APR as high as 399.7 per cent. The lost tapes also held bank account details and CV information for 20,000 of the company’s employees. The ...




June 6, 2012

Most people wouldn’t give friends more than £5

by Jan Harris
Most people wouldn’t give friends more than £5
The majority of people would only lend a friend a maximum of £5 without expecting the money to be repaid. Around two thirds of the 1,811 people surveyed by website MyVoucherCodes.co.uk said they regularly lend money to friends, but only on the understanding that the cash will be returned. Forty-three per cent of those surveyed said that £5 would be ...




May 30, 2012

Payday Bank’s ‘Jubilee loan’ slated by debt campaigners

by Jan Harris
Payday Bank’s 'Jubilee loan' slated by debt campaigners
Payday Bank’s blog article suggesting that a payday loan would be good way of funding Jubilee parties, has been called ‘irresponsible’ by debt charities. The article, which was written by a contracted third party, said: "If you want to boost your Jubilee spending pot, a same day loan could provide the cash you need." It was removed from Payday Bank’s ...




May 28, 2012

MP criticises new payday loan regulations

by Jan Harris
MP criticises new payday loan regulations
The government has gone some way to stop payday loan customers racking up unmanageable levels of debt, but MP Stella Creasy said the new rules are of ‘limited value’. Trade associations representing around 90 per cent of payday lenders have agreed to introduce new codes of practice by 25 July. Under the new regulations, payday loan companies belonging to the trade associations should ...




May 22, 2012

OFT warns Wonga over debt collection methods

by Jan Harris
OFT warns Wonga over debt collection methods
Payday loan company Wonga used aggressive and misleading methods to collect debts from customers, the Office of Fair Trading (OFT) has found. Wonga sent letter and emails to certain customers suggesting they had committed fraud and threatening to report them to the police if they did not act in the way Wonga suggested. The company also made the allegations in phone ...




May 18, 2012

Payday loans trapping people in debt

by Jan Harris
Payday loans trapping people in debt
Payday loans have soared in popularity over the past few years, but consumer group Which? warns they are trapping people in a ‘downward spiral of debt’. Problems start to escalate if people are unable to pay back their loan on time, with some companies charging excessively high penalties for late repayments. Which? discovered that Quid24.com charged £150 for repaying a ...




May 11, 2012

Sainsbury’s promises to offer cheapest loans

by Jan Harris
Sainsbury's promises to offer cheapest loans
Supermarket retailer Sainsbury’s is leading the market at the moment with a 5.9 per cent loan rate, and it has also launched a Price Promise Guarantee. The 5.9 per cent rate is available on a £7,500 loan with a three-year term, while the same loan over five years would be available at 6.1 per cent. Under the retailer’s Price Promise Guarantee, if ...




April 5, 2012

Yes Loans to appeal against loss of Money Worries licence

by Jan Harris
Yes Loans to appeal against loss of Money Worries licence
Credit broker Yes Loans has decided to appeal against the withdrawal of a consumer credit licence from its affiliate company Money Worries Ltd. The Office of Fair Trading (OFT) stripped Yes Loans, and its affiliate companies, Money Worries Ltd and Blue Sky Personal Finance Ltd, of their licences in March, after customer complaints prompted an investigation into the ...




March 9, 2012

Payday loan company’s licence revoked

by Jan Harris
Payday loan company’s licence revoked
Credit broker Yes Loans has had its licence revoked by the Office of Fair Trading (OFT) over concern that its business practices ‘deceitful and oppressive’. Two associated businesses, Blue Sky Personal Finance and Money Worries Limited, have also been found to be unfit to hold a consumer credit licence. Following a long-term investigation, the OFT revealed that Yes Loans sold expensive payday loans to some ...