Payday loans – the charging broker scam

Payday loans – the charging broker scam
August 14, 2014 Stacey Corrin
Charging Broker payday loans scam

Have you ever been the victim of a charging broker?

The charging broker scam broke earlier this year. It became clear that some credit brokers were charging unexpected fees for arranging payday loans. This scam affected many consumers, many of whom found themselves charged up to £60 by brokers. Just to process an application for online payday loans.

Some brokers were also giving themselves up to six months to find a result. This almost defeats the purpose of this type of finance, which should be flexible and fast.

Facts and Figures

Citizens Advice Bureau came up with some interesting figures. They indicated two in five people who complained about payday loans did so due to fees like this. Over half found themselves charged with unexpected fees.

42% were subject to deceptive practices by certain brokers. These include charging fees for services that were never signed up for. Also charging higher fees than agreed. In some cases brokers pretending to be lenders rather than being up front about being a broker.

The advantages of payday loans have drawn many people to using them in the UK. The process of application is fast, as it is all completed online. A good broker is able to ease payday loans with various lenders.

This is so the cash transferral to the applicant is much quicker than expected. Yet, many complaints made to the CBA indicated applications had taken months to process. Many had still not received the loan, despite the charge of higher fees than expected.

Non-charging brokers and lenders

Cash Lady is a non-charging broker and we are up front about being a broker, rather than a lender. The CBA also found many people applying for payday loans thought they were dealing directly with a lender. This was a result of marketing messages on websites, which were confusing or, deceptive.

This can often be an issue when searching for any product or service online. Websites can be convincing and determining whether the organisation is genuine is an issue faced by anyone buying online. The key, is to move on and find one that’s up front. Not just about its role in the process. But one that does not charge its customers fees.

Perhaps the biggest issue faced by payday loans customers who used a charger broker is that the fees are difficult to get back once paid. Fees for a loan that is not taken out should be repayable. Many brokers refuse to refund the money. This happened to 28% of customers according to the Citizens Advice Bureau figures.

Final thoughts

If you want to apply for payday loans, without the hidden fees and costs, Cash Lady is a non-charging broker. You just need to be at least 18 years old and a UK resident with a UK bank account, as well as in employment. You could have access to finance within hours – and without any fees to pay.