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A £35m Payday For Borrowers…But At What Other Cost?

If you are an occasional follower of my Blogs, you will pick up on the fact that I would not be a big fan of the Payday loan provider. Borrowing money at high cost to repay already unaffordable debt is the perfect storm – it will not remove the metaphorical dark cloud hanging over you – if anything…it is likely to make the situation worse.

No truer words can best describe the position former Payday loan provider, CFO Lending Limited (“CFO”), have found themselves in. They claimed that they were here to help customers who may be experiencing financial difficulty with the set-up of affordable and sustainable repayment options.

You will not be surprised to know that CFO no longer provides access to Payday loans, particularly as they were banned by The Financial Conduct Authority (“FCA”) earlier this year and it has been forced to repay £35m to its borrowers.

Mr Jonathan Davidson of the FCA stated how they “discovered that CFO Lending was treating its customers unfairly and we made sure that they immediately stopped their unfair practices".

The FCA does not take too kindly to lenders treating customers unfairly and has been making examples of the Payday loan companies.

The other, more obvious and well publicised example I am talking of, is the FCA report commissioned in January 2014 into the RBS / Ulster Bank GRG. This report, which we have all been eagerly anticipating, keep being delayed and if our experience is anything to go by is going to contain information that should result in RBS being shut down…no-one should be too big to fail.  

Let us also not forget about the Lloyds Banking Group – why is the FCA continuing to protect them when they are not adhering to the FCA Mortgages Conduct of Business guidelines (“MCOB”). In 2014 we highlighted our concerns to the Directors of Lloyds Banking Group on an internal policy. They had the audacity to put their non-compliant policy in writing to our office and continue to put this in writing to their customers to this day.

Basically, I can’t spare you the detail, MCOB Section 13 refers to guidelines on what lenders must and/or should do when it comes to dealing with customers in arrears and in financial difficulty. Section MCOB 13.3.2A states, and I quote, they “must, when dealing with any customer in payment difficulties liaise, if the customer makes arrangements for this, with a third party source of advice regarding the payment shortfall or sale shortfall.”

Post an unsatisfactory response from Lloyds Banking Group we raised the matter with the FCA and to this day, despite the evidence being in black and white, their conduct is still under investigation. In the meantime, the Lloyds Banking Group subsidiaries are harassing customers, treating them unfairly to the extent that they are under investigation here in Northern Ireland for alleged fraudulent activity with customer accounts in property repossession proceedings.

Whilst we welcome justice been served for the CFO £35m, what cost will other borrowers have to pay in their dealings with the so-called main lenders and the inaction being shown by the FCA.  GDP are here to level the playing field between bank and borrower so if you want to educate and empower yourself financially – give us a call on 028 92 444 555. 

Darwin AllenComment