FOS launch a campaign to combat unfair payday lenders


Few news stories of the past few years have been as pervasive as that of payday loans. A financial phenomenon without precedent, payday lending has reshaped how we think about borrowing money. A few short years ago, payday borrowing – offering short-term loans at astronomically high rates to keep the borrower going until the next payday – was a tiny industry. Recent reports now indicate that the business is currently worth more than £800m a year. The industry has flourished in a period of economic uncertainty. As many ‘traditional’ banks and lenders floundered, payday loans have become more popular than ever.

For those borrowers in need of a speedy cash transfer to tide them over until the next month, short-term loans can appear to be an attractive proposition. However, the loans are not without danger. The Financial Ombudsman Service (F.O.S.) claims that in 2014 an increased number of callers are contacting them to discuss ‘money worries’ and people who’ve taken out short-term loans are particularly likely to find themselves in financial trouble.

If you feel that your lender has treated you unfairly, you can ask the Financial Ombudsman Service to step in. The FOS is a service established in 2001, which helps settle disputes between consumers and UK-based financial services businesses, such as banks, building societies, insurance companies and finance companies. The F.O.S.’s job is to sort out disputes between people and businesses – they act quickly, fairly and informally. They’re a completely independent body and anyone struggling with short-term loans should consider contacting them.

But what can borrowers do if they find themselves unable to make their repayments on time? The FOS advises that ‘it’s important that you’re upfront with lenders if you’re struggling’. Your lenders or bank should be working with you to find the most effective way for you to make your repayments. But, unfortunately, some customers of payday loan companies have found them unhelpful or uncooperative.

Don’t suffer in silence if you’re struggling to balance your books. There is expert advice available and the FOS is an excellent place to start.


Not all lenders are the same. The FOS state that many companies try their very best to help their customers. But how do you tell if they’re not treating your treating you fairly?

Be very cautious if your lender:

  • Doesn’t listen to your attempts to resolve the problem or is completely reluctant to find a solution to your issues.
  • Calls, emails or texts you so much that is becomes harassment.
  • Contacts anyone else to discuss your debt – without your permission.
  • Makes repeated attempts to remove money from your account – and costs you money each time.
  • Repeatedly charges you for each missed payment.
  • Doesn’t tell you about help that’s available – like the FOS – they have to do this by law.
  • Attempts to intimidate you or issues outright threats.

By their very nature, payday loans can become very expensive incredibly quickly. In fact, according to a recent Guardian article, ‘lenders know that many borrowers will never repay the loans’. Businesses such as Wonga are profit-making enterprises and the implications of entering a contract with them can be serious.

If you’ve had any problems like this, then get in touch with the Financial Ombudsman Service. Visit their website or call 0300 123 9 123.

2 Responses to FOS launch a campaign to combat unfair payday lenders

  1. Kathy says:

    First of all, I agree that these agencies are predatory and have wildly exaggerated interest rates. However, they cater to a segment of the population that is unable to get a loan at a traditional financial institution. In the U.S., at least, banks were told that they had to start giving mortgages to people who couldn’t verify their income, or whose credit was so damaged that they were a huge risk for the banks to loan to. So the birth of sub-prime mortgages and so-called liar’s loans came about because the government told banks they had to follow bad business practices. We all know what happened to the housing industry when – surprise, surprise – these borrowers defaulted on their loans. So that experience taught the banks to once again tighten up their lending standards, which freezes a segment of the population out of traditional lending systems. The payday loan gives them access to funds they need but that a bank would not lend. I would never utilize this type of loan, but I am fortunate to be in a position where I can make that choice. Too many people don’t have the choices I do and this is their only alternative.

  2. Steve Pett says:

    It is interesting to note that the people who are supposed to be regulating the industry are, as every, many years behind common sense, and that moving forward has been left to the entirely separate Compo department – FOS.

    Why does it take Financial Services Regulators many, many years to see what is blindingly obvious to anyone with any common sense? The PPI “scandal” was obvious even before the Regulators started to wreck the industry good and bad. I am talking about 1988. And they get paid megabucks to lack common sense.

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