some careful consideration, you may have decided that a payday loan is the most
sensible choice for your financial situation - at this point it is time to
start looking online for the best possible lender. As soon as you enter the
term ‘payday loans’ into Google, you will probably notice a huge variety of
different websites that appear, and this is because a number of sites merely
gather information before passing your details on to a selection of different
lenders. These ‘brokers’ operate by getting a commission for every successful
application that they are a part of, but there can be drawbacks to applying for
a loan in this manner.
Recent information has been released by the FOS (Financial Ombudsman Service) that suggests that within the past year, complaints about these 'middlemen' websites have hit the 10,000 mark (http://www.bbc.co.uk/news/business-28835558). While data protection issues have been a concern, i.e. your details being submitted to a wide variety of sub-prime credit companies, some of the more shocking examples have revolved around companies that charge a fee with the promise of guaranteed acceptance for a loan. Some stories have emerged of payments being taken from bank accounts to arrange a short-term payday loan, with or without the account holder's permission. These negatives can usually be avoided by only contacting a direct payday lender.
The consumer credit charity Stepchange has a very clear message for the UK government - they want the process of charging these fees outlawed completely. They feel that charging those in financial hardship to arrange a loan is naturally counterproductive, and the best advice is to only approach a payday lender directly. At the same time, this type of finance should be managed carefully due to the interest charges that are involved, but people should bear in mind that a reputable lender will carry out extensive affordability checks. Going through a separate website to apply for a loan could mean that this vital step is not carried out, and this is another concern that is expressed by the charity. In the BBC report, the sentence that speaks volumes is the fact that the majority of brokers with excessive fees tend to refund these charges as soon as the ombudsman becomes involved!
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk