Recently, payday lenders have been charged of “reckless behavior”. They are alleged that trap people for loans who aren’t capable and couldn’t even afford.
Recently a survey was conducted by Citizens Advice and according to them there are various companies still existed who don’t perform basic checks before approving loan applications to understand whether the borrower is capable to repay loan or not.
In the survey, we have asked 400 people who had applied for payday loans stated that one in four hadn’t inquired or being asked about their monetary background or capability to repay a loan. Even, 12 month loans to make the study more fruitful Citizen Advice volunteers illustrated that 27% stated insufficient financial check were the prime ground of issues of the issues to the people they aid.
Survey held in England and Wales reported, the main problem arise when restrictions on payday loans interest prices was initiated in January 2015. Citizen Advice assisted a 33-year-old man who had approved for payday loans in spite of poor credit check, absence of permanent address proof, problem of depression due to alcoholism and beforehand affirmed bankrupt and no income source. Their report comprise, due to reckless behavior of payday lenders borrower find difficulty in repaying their credit amount.
People who had been surveyed clearly said, it was very simple to acquire payday loans as lenders don’t asks you to meet hardcore credit check and follow online application procedure. Report may also comprise that, to allure customer’s new attractive methods being exercised to gather collection from borrowers.
As per report submitted by Citizen Advice, there are numerous cases were also finding where a lender ask borrower to share their bank account details along with their secret login ID and Password so that they can simply access their bank account and regulate loan funds without the interference of the borrowers.
Chief Executive of Citizen Advice, Gillian Guy stated: “Reckless behavior of payday lenders enhance number of trapping cases”.
But, the new guidelines initiated by Financial Conduct Authority have assisted to clean up the market and significantly lessen the number of cases. However, certain payday loan firms are breaking the FCA’s guidelines and selling people payday loans without checking their credit check. 12 month loans no fees
“This is the right time when FCA has to turn guidelines into strict rules, compelled payday lenders to follow thorough financial checks before approving loan application to avert people from extreme debt issues.” Visit – http://www.12monthloanshop.co.uk/