January 2012

Three-Quarters Of Complaints Against Payday Lenders Upheld By Ombudsman

Debt charity Debt Advice Foundation is warning consumers of the dangers of taking out payday loans after new data from the Financial Ombudsman Service revealed they topped the table for the percentage of complaint decisions made in favour of the consumer.

In the last three months of 2011, almost three quarters of complaints about payday loans were upheld. The Financial Ombudsman Service received 75 new complaints about payday loans from October to December last year – 25% more than they received for the whole of 2010/11.

Almost One In Five To Retire In Debt This Year

The number of people in debt when they retire is falling – but those who do retire with outstanding debts owe on average more than £38,000, according to new figures from Prudential.

Former Insolvency Service Director Is New Debt Advice Foundation Trustee

Karol Sanderson, a former Director of Enforcement at the Insolvency Service, has joined Debt Advice Foundation as a trustee. A former Official Receiver, Karol has more than 30 years’ experience in the field of insolvency and debt, dealing with the administration of bankruptcies and company liquidations, investigations and policy matters.

Karol is currently also an independent member of the Greater Manchester Police Authority and Chair of the Admissions & Licensing Committee of the Institute of Legal Executives.

Debt Advice Foundation Helps The Sun's Readers

With payday loans very much in the national spotlight at present, The Sun’s SunWoman section put together a comprehensive article demonstrating just how quickly this type of credit can spiral into unmanageable debt.

SunWoman also wanted to offer their readers a dedicated helpline on the day, which is how two members of Debt Advice Foundation team found themselves in the midst of the Sun’s editorial floor, fielding calls from Sun readers on what turned out to be a wide range of debt issues.

Lawyer Warns On Payday Loans

A former lawyer at the Financial Ombudsman Service has warned that payday loans companies are failing to assess the credit worthiness of applicants and that the law regulating this type of credit is inadequate.

James Ward, associate at Thomson Snell & Passmore,said “There is no time to assess whether they should be lending to the borrower at all, and this is virtually impossible without a face-to-face transaction.”