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Payday Lending Scams



Razi

Active member
Aug 3, 2003
1,622
Stevenage
Not sure what to do with this one - my girlfriend (without my knowledge) thought it'd be a good idea to take out 2 Payday loans back in early June, each for £100. One was with Payday UK and another with Lending Stream. These are both now fully paid back with the appropriate interest.

Today, almost 2 months after the initial application, she has received a text and an email from a company called Power Funding who have written to confirm that her Power Funding Fee of £69.75 was being debited. A quick call to her bank, Halifax, suggests that the payment was indeed pending but they have refused it at her request. However, they've suggested that they will be unable to refuse any further transactions should they be requested by Power Funding?!

My girlfriend has no idea where this has come from, but does acknowledge that she didn't read any Ts & Cs and just applied through the two different website. Having a look online hasn't turned up too much information - it's hard to find any information on "Power Funding" (website is http://www.power-funding.biz) and the contact details are 1 Liverpool Street, London, EC2M 7QD - 0844 318 8001. The number does turn up some information on a Google search, mostly being associated with about 3 or 4 other similar companies. Other people have described writing/calling/emailing with no response.

Anyone have any idea of the legal position on this - and having payments taken out of her account (I think it's debiting her card). Surely she can just cancel her card and replace it with a new number to solve the problem?
 




Razi

Active member
Aug 3, 2003
1,622
Stevenage
Wouldn't a solicitor charge, even for giving advice? We're really not in a financial position to be really paying for legal advice/assistance.. :(
 




The Wookiee

Back From The Dead
Nov 10, 2003
14,824
Worthing
Cancel the debit card straight away ! A mate of mine got caught up in these payday loans, some are sister companies and will debit your account without warning. You must cancel the card
 




South Stand Bonfire

Who lit that match then?
NSC Patreon
Jan 24, 2009
2,181
Shoreham-a-la-mer
Try Citizen's Advice, I am sure they will help. You could probably object to unfaie T&Cs but may come down to brinkmanship. Don't pay and put it in writing that you are taking legal advice and see what happens. May frighten them off on the basis that many people won't complain. It is actually illegal to charge a punative interest rate/charge for borrowing whin is what is sounds like. Hold your ground unless you are advised otherwise.

Wouldn't a solicitor charge, even for giving advice? We're really not in a financial position to be really paying for legal advice/assistance.. :(
 


stupendor

Active member
Feb 21, 2010
110
wonga.com is 4214% representitive APR!!!!
 








ferring seagull

Well-known member
Dec 30, 2010
4,606
Wouldn't a solicitor charge, even for giving advice? We're really not in a financial position to be really paying for legal advice/assistance.. :(

I don't think he/she would for an initial consultation. Check when you call up !
 


GoldWithFalmer

Seaweed! Seaweed!
Apr 24, 2011
12,687
SouthCoast
Mate of mine did this a few years ago-was in perpetual debt for what seemed like an eternity...waste of time...hold off the things you love for 1 week..and go from there.

Edit: it was a cheque based solution back then.2007-2008
 






seagullsovergrimsby

#cpfctinpotclub
Aug 21, 2005
43,690
Crap Town
New girlfriend, one who doesnt think 1000% APR is reasonable!!

payday loans are normally 2500% - 2800% APR , ask the girlfriend if she gave her credit card details when applying for these loans , if so get Halifax to cancel the card and re-issue another so the card number is different. If she has given the bank account details you might have to consider changing who you bank with.
 


Robot Chicken

Seriously?
Jul 5, 2003
13,154
Chicken World




Razi

Active member
Aug 3, 2003
1,622
Stevenage
I agree that cancelling the card seems the best bet - since it seems to be the card being debited, rather than her bank account.

The 1000% APR is only really relevant over the course of a year - the idea is that they're paid off within a month. It seems she paid about £255 back on the £200 she borrowed 20 days earlier. I think she has learnt her lesson, my lending rates are far more reasonable! I was thinking of writing a letter requesting details on the agreed contract and being sent by recorded delivery. All seems a bit like a scam - mainly because this 3rd party company wasn't directly engaged by my GF. Just some randomer who has popped up and started debiting money, but obviously has her card/address details and was the same day as the Payday loan that she agreed.

Sigh.
 






The Wookiee

Back From The Dead
Nov 10, 2003
14,824
Worthing
Seriously these companies are the lowest of the low, be warned ! When you canx your card you will be bombarded with txts and emails offering you other payday loans, once you apply you have to give your card details, you will then be declined but you will have your acct rinsed ad they are sister companies of the original company you took the loan out with. Avoid ! ! !
 




Razi

Active member
Aug 3, 2003
1,622
Stevenage
If it's a recurring charge then cancelling the card won't stop the vendor charging on the card. The charging has to be stopped at the source.

http://www.moneysavingexpert.com/banking/recurring-payments

That's interesting reading - thanks. Amazing that there's no real process in place to prevent this kind of thing from occurring, particularly if you're dealing with a dodgy company based overseas. Despite the address on this company being in London, some Google searching suggests it's actually USA based. I think that a letter to them requesting the contract to be cancelled and payments to be stopped should be the next step, along with a trip to CAB to ask for further advice.

Even more annoying is that it's on my address - rather than hers (since her bank account is registered at my address) so I hope it doesn't cause credit implications..
 


moggy

Well-known member
Oct 15, 2003
5,050
southwick
It may be a lot of hassle but you could close the account completely then open a new one reinstating legit debits etc
 



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