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Most people will be aware of the FCA ruling that Wonga have failed to conduct affordability assessments correctly when making loans, with the result that Wonga effectively have to write of £220 MILLION of 'business' due to lending to people where they allegedly (though as the FCA have ruled on the matter, its probably a fact), did not carry out their legislative duties.
So what does this mean for the Payday Loan industry and those who have taken out loans and fallen into arrears? Well its not going to open up the floodgates for a 'free for all' but it does strengthen a debtors position if they have fallen into arrears and want to use an argument of 'irresponsible lending'.
Those who follow the PDL thread where will be familiar with a list of common questions I ask people who are struggling with PDL companies:
The questions I've highlighted in red above are directly linked to whether a PDL company have carried out the legislative requirements required to assess whether an applicant can afford the product being offered to them, and to ensure that they understand the product being offered to them.
Unfortunately (for them), a large number of PDL companies have not (especially with regard to older accounts), which gives a debtor some options in arguing for the debt to be written off (or at the very least a significant settlement). The recent Wonga/FCA case only reinforces this approach.
If you are looking for help with PDL issues, please do not be put off by what seems like a huge amount of information being asked for. The devil, as always, is in the detail, and detail is something that a lot of PDL companies are not good at
Best
SnV
So what does this mean for the Payday Loan industry and those who have taken out loans and fallen into arrears? Well its not going to open up the floodgates for a 'free for all' but it does strengthen a debtors position if they have fallen into arrears and want to use an argument of 'irresponsible lending'.
Those who follow the PDL thread where will be familiar with a list of common questions I ask people who are struggling with PDL companies:
- Date loan taken out
- Date a payment was last made
- Status (i.e. did you discuss a payment arrangement or just stop paying)?
- Did you have to fill out an application form and do you have a copy?
- Were you given any pre-contact information or fact sheet so you could assess the affordability of the loan that was being offered to you?
- Were you given a credit agreement and if so do you have a copy?
- Did you at any time 'roll over' any of the loans (or did you 'reloan') and if so how many times?
- If you did roll over or reloan were you provided new pre-contract information and new credit agreement each time and if so do you have a copy?
- Did you receive any arrears notice/letter also containing information on where you can go to get advice on your debts?
- Have you received any sort of default or termination notice to your POSTAL address?
- When was the last time you sent any correspondence to them (either by email or post)?
The questions I've highlighted in red above are directly linked to whether a PDL company have carried out the legislative requirements required to assess whether an applicant can afford the product being offered to them, and to ensure that they understand the product being offered to them.
Unfortunately (for them), a large number of PDL companies have not (especially with regard to older accounts), which gives a debtor some options in arguing for the debt to be written off (or at the very least a significant settlement). The recent Wonga/FCA case only reinforces this approach.
If you are looking for help with PDL issues, please do not be put off by what seems like a huge amount of information being asked for. The devil, as always, is in the detail, and detail is something that a lot of PDL companies are not good at
Best
SnV