Interest rates are capped
Many countries are now putting caps on payday loan interest rates, including Australia, while the United States and EU have also passed laws that regulate the sector. While the cap in Britain has been welcomed, some short-term lenders argue that it has not had the desired impact. They argue that the cap hasn’t reduced household debt or reduced the need for credit. Regulators are also keen to expand their monitoring of the credit industry after years of mis-selling by banks.
Several state legislatures have enacted rate caps to help protect consumers from paying outrageous interest rates for short-term loans. Currently, 18 states and Washington, D.C. have capped payday loan interest rates at 36% or lower. Several other states are considering similar legislation.
Borrowers can complain to the Financial Ombudsman Service
If you have a complaint about a high street payday loan shop, you can use the Financial Ombudsman Service. They can investigate complaints about poor service and unfair charges. However, they cannot investigate complaints against firms that are in administration. Sadly, some companies, including Wonga, have closed down following high profile failures.
Complaints can be made within six months of the incident. A complaint should be lodged in writing. The lender should provide a complaints procedure and outline their response to any complaint. Write to the lender explaining your complaint in as much detail as you can and supplying any evidence that supports your case.