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Doorstep lenders accused of harassment and intimidation
Doorstep lenders accused of harassment and intimidation
This is a duplicate of the Blog Entry made on: 4th March 2017 09:02
This is a duplicate of the Blog Entry made on: 4th March 2017 09:02
amid claims they break watchdog rules
Online lenders that send people door to door to collect repayments have been accused of harassing borrowers and pressuring them into taking on more debt. In a report published by Citizens Advice, the charity has warned it has seen evidence of some doorstep lenders taking advantage of their position and putting people at risk of serious debt problems. In some instances, instead of people being offered debt repayment plans, doorstep lenders have pressured customers to take out further loans to finance their existing debt. Doorstep lenders typically allow borrowers to take out a loan online but will then send an agent to their home once a week to collect repayments.
In the UK as a whole, there are estimated to be 1.3 million people with a doorstep loan and around 420 doorstep lenders in operation, according to the Consumer Credit Association. Last year Citizens Advice helped around 23,000 people with unmanageable debts they had taken out through doorstep loans. Among these, the average debt was £700 and a third had taken out more than one doorstep loan. Now the charity says harsh debt collection methods are being used by some companies - partly because their collectors are paid on commission for each payment recovered. In one example given by the charity, a man was visited by a lender on the same day his son had died and the lender refused to leave until a family member had gone with him to an ATM to withdraw cash.
In another example a lender harassed an elderly, blind woman for debt repayments while she was in hospital receiving treatment for a stroke. Citizens Advice says it has seen a number of cases where lending agents have threatened to tell the family and friends of customers about their debts, have harassed them for repayments in public places and have demanded payments from family and friends....Read more here
- Citizens Advice warns that doorstep lenders are breaking the FCA's rules
- Some firms are failing to assess if borrowers can repay a loan before it's given
- Doorstep lending agents paid on commission, incentivising them to pile more debt onto struggling borrowers
Online lenders that send people door to door to collect repayments have been accused of harassing borrowers and pressuring them into taking on more debt. In a report published by Citizens Advice, the charity has warned it has seen evidence of some doorstep lenders taking advantage of their position and putting people at risk of serious debt problems. In some instances, instead of people being offered debt repayment plans, doorstep lenders have pressured customers to take out further loans to finance their existing debt. Doorstep lenders typically allow borrowers to take out a loan online but will then send an agent to their home once a week to collect repayments.
In the UK as a whole, there are estimated to be 1.3 million people with a doorstep loan and around 420 doorstep lenders in operation, according to the Consumer Credit Association. Last year Citizens Advice helped around 23,000 people with unmanageable debts they had taken out through doorstep loans. Among these, the average debt was £700 and a third had taken out more than one doorstep loan. Now the charity says harsh debt collection methods are being used by some companies - partly because their collectors are paid on commission for each payment recovered. In one example given by the charity, a man was visited by a lender on the same day his son had died and the lender refused to leave until a family member had gone with him to an ATM to withdraw cash.
In another example a lender harassed an elderly, blind woman for debt repayments while she was in hospital receiving treatment for a stroke. Citizens Advice says it has seen a number of cases where lending agents have threatened to tell the family and friends of customers about their debts, have harassed them for repayments in public places and have demanded payments from family and friends....Read more here