Ombudsman warns against payday brokers

29 October 2014

The Financial Ombudsman Service has today reiterated its warning about payday brokering firms that raid people's bank accounts without them knowing.

Moneywise has seen a significant rise in the number of complaints about payday brokers in recent months, with people concerned that money has been taken from their accounts without them receiving the loan they had applied for.

Payday brokers are businesses that put hard-up consumers in touch with loan firms for a sizeable fee. When consumers sign up, they are often unaware that the charges will be levied, leaving them shocked when their money has disappeared from their bank accounts.

The Ombudsman said 11,500 consumers had contacted it since April to complain, almost double the amount that complained in the whole of the previous financial year. In two-thirds of cases, it found that the customer had been treated unfairly but it added in most cases, the businesses refunded the cash as soon as the FOS became involved.

In some of the worst cases, it had seen accounts raided multiple times without warning as applicants' bank details were passed on to other brokering websites, the Ombudsman added.

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Senior ombudsman Juliana Francis said: "It's disappointing to see that more and more people are being misled into thinking that these credit broking websites will get them a loan.

"In too many of the cases we sort out, no loan is provided and people's bank accounts have been charged a high fee, often multiple times.

"If money has been taken from your account unfairly or without warning, the good news is the ombudsman is here to help. Give us a call on 0800 0234 567 and we'll help you quickly get things sorted."

For more read: Loan firms left me overdrawn


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