TheClaimsGuide.com Sees Faster Payouts for Loan Stream Clearing
The Financial Ombudsman (FOS) says in relation to affordability: “Relevant rules, regulations and guidance all refer to a borrower’s ability to sustainably repay any credit extended. And being able to sustainably repay a loan is described as doing so without undue difficulty, while being able to meet other commitments and without having to borrow more.
To grow faster, many payday lenders failed to do the necessary checks to ensure the loan was affordable. These checks should not be based solely on the borrower’s answers to income and expenses, as these are sometimes incorrect. Lenders should do their own checks (eg checking bank statements) to make sure the borrower is not in financial difficulty.
Claims against high cost lenders for irresponsible lending have led to financial problems for many previously profitable lenders. This includes the highly publicized collapse of payday lender Wonga in 2018. More recently, there have been ongoing difficulties with guarantor lender Amigo Loans, which is trying to set up a scheme to survive. Morses Club also recently announced an increase in claims against them, following the controversial departure of the CEO and the sale of his shares.
The FOS makes the final decision on any claim where the lender and borrower cannot agree. Among the lenders with a high retention rate by FOS is Lending Stream. Lendingstream is a high-cost payday lender that offers short-term loans of £1,500 with an APR of up to 1,333%. In its latest figures, the FOS upheld 70% of complaints against Lending Streams owner Gain Credit LLC. This compares to an average of 47% for all bank and credit receivables.
TheClaimsGuide.com is seeing fast settlements and payments for many loan stream claims, which means more customers don’t have to wait long to receive their payment. This is partly because the lender has decided to settle the claims themselves and avoid them going to the FOS, which incurs costs for the lender.
TheClaimsGuide.com helps with claims against almost all high cost lenders for a fee on a no gain, no fee basis (individuals can also file a complaint with a lender for free). Once the complaint is filed, the lender has 8 weeks to respond to the complaint and then an additional month to make payment. However, if nothing is agreed and the complaint is forwarded to the FOS, it may take several more months. In some cases, it takes more than a year to receive compensation.