Complaints over payday loans double

Tuesday 08 July 2014

The number of complaints regarding payday loans has more than doubled since 2012, new figures reveal, as the Financial Ombudsman warns people to confront "the shame factor" and speak up about debt worries. Almost 800 people made complaints about payday lending in the 2012/13 financial year, a report released today shows, compared with fewer than 300 in the previous financial year.

In almost two thirds of cases taken on by the ombudsman, the office found in favour of the consumer. The ombudsman expressed concerns that too many people struggling to repay loans felt powerless to make a complaint. Principal ombudsman Caroline Wayman said: "We often hear from people who took out a payday loan as a desperate last resort and blame themselves when the debt starts to spiral out of control.

"It's important that people don't feel trapped with nowhere to turn because of the stigma associated with short-term lending.

Mike O'Connor, chief executive of debt charity StepChange, said: " The fact that most complaints against payday loan companies are upheld is further evidence that when it comes to acting in the best interests of consumers, in many cases they fail to do so.

"We know that payday loans are often a last resort for people who are already in serious financial difficulty. We urge anyone struggling with any form of debt to get free and impartial debt advice at the earliest opportunity."