There is widespread poor practice in the payday loans market, Which? has claimed following an investigation.
It claims issues include potential breaches of the Consumer Credit Act, poor privacy provisions and inflated APRs.
Which? has reported two lenders – Paydaykong.com and Swiftmoney.co.uk – to the Office of Fair Trading (OFT). Paydaykong.com appeared to be operating without a valid Consumer Credit Licence. Although the company that owns Paydaykong.com, Easyloans Ltd, does have a Consumer Credit Licence, this does not cover the name Paydaykong.com. Which? has therefore reported Paydaykong.com to the OFT for a suspected breach of the Consumer Credit Act.
Meanwhile, Which? said that Swiftmoney.co.uk failed to show the APR for its loans anywhere on its website. Consumer credit legislation requires lenders to show APR on their websites.
Which? has also reported Casheuronet UK, which operates Quick-payday.co.uk and Quickquid.co.uk, to the Information Commissioners’ Office (ICO) after its researcher received dozens of unsolicited third party emails and phone calls in the days following his application. This was despite the lender assuring Which? that it does not sell customers’ details to third parties.
Quick-payday.co.uk only has one tick box to cover both its terms and conditions and privacy policy. In order to accept the terms and conditions and therefore continue the application, the customer must therefore also consent to sharing their personal data with third parties. Casheuronet UK, which owns Quick-payday.co.uk, told Which? that it does not share customer data with third parties. However, within a few days of making his application, the Which? Money researcher had received 47 unsolicited emails and numerous phone calls from payday loan, impaired-credit and claims management companies. Casheuronet UK is investigating the matter.
Other examples of poor practice included potentially misleading claims about APR, firms encouraging customers to borrow more than they need and to rollover existing loans for several months. Which? also found that several firms had lax website security, with one provider, Swiftmoney.co.uk, requiring customers to enter their bank details on an unsecured page.
Richard Lloyd, Which? executive director, said: “Payday loans might seem like a good solution for people whose money won’t stretch to the end of the month
