Financial Services Watchdog “Surprised” by So Few Complaints Against Payday Lenders
Susan Taylor of Financial Services Complaints Limited is surprised to see no more complaints about payday lenders.
A consumer watchdog is surprised that so few people are pointing fingers at payday lenders for misconduct.
Financial Services Complaints chief executive Susan Taylor estimates that only 10 percent of the complaints she sees are filed against payday lenders.
But there are a lot of things a payday lender could do wrong that could get a consumer hundreds of dollars in compensation, she says.
Financial Services Complaints works alongside the Trade Commission to hold financial services companies to account. By law, all lenders must be members of an approved dispute resolution system.
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Many of the over 20 complaints that were filed with the Commerce Commission against Superloans payday lenders, would be a fault for which Financial Services Complaints could investigate and award compensation because Superloans is a member of the program.
Often, the illegal behavior of payday lenders investigated by them resulted in compensation payments of between $ 200 and $ 1,000, Taylor said.
It could make a huge difference. “If they had a $ 1,000 loan, the amount they have to pay back could be cut in half.”
MONIQUE FORD / STUFF
It’s not hard to find people who feel that payday lenders are taking advantage of vulnerable people.
She estimated that complaints from payday lenders represented less than 10 percent of complaints received.
“We find this surprising given that, anecdotally, we hear a lot of stories about payday lenders who might not comply with their loan obligations. “
She suspected it was because people were unaware of the service or were reluctant to complain because they feared the line of credit would be cut.
Taylor said if it turns out that the lender was in default, it could not charge any interest or fees for the period it was in default. His organization could help negotiate a settlement and an appropriate repayment plan for the borrower.
In “occasional” cases, financial services complaints could find that a payday lender charged “unreasonable fees,” she said.