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Middlemen 'pose as payday lenders to siphon off extra fees'

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cash loan – Yahoo News Search Results:

One fifth of consumers who complained to Citizens Advice had had their card
details passed on to other brokers without their knowledge. Some people had
not even completed the application process but still found their cards being
charged.

Fees are refundable if a loan is not taken out – but Citizens Advice’s
analysis of 228 cases where a customer attempted to get a refund found that
28pc were refused, 14pc were promised a refund which never appeared and 42pc
struggled even to get in touch with the broker.

In one case seen by the charity, a young woman sought help after she applied
for a payday loan and was bombarded with texts from other payday loan firms “within
seconds”.

She contacted two or three of them but decided not to take out a loan. Over
the next few days she found that several sums had been drained out of her
bank account from different brokers, despite the fact that no loan had been
given.

The payday lending industry is facing a clampdown. Tough new regulator the
Financial Conduct Authority (FCA) recently announced plans to crack down on
the sector, including limiting the number of times payday lenders are
allowed to roll over loans to twice, forcing them to put “risk warnings”
on their advertising and limiting the number of attempts lenders can make to
claw back money if there is insufficient cash in a borrower’s bank account
to two.

The FCA is also considering the fees charged by payday firms to borrowers who
default as part of plans for a cap on the total cost of credit. The
Competition Commission will produce a report into the payday industry later
this year.

Citizens Advice wants the FCA, which takes over regulation of consumer credit
in April, to take an equally tough stance with credit brokers.

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Middlemen 'pose as payday lenders to siphon off extra fees'

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