The Financial Ombudsman Service (FOS), the independent body that adjudicates on complaints where the customer and financial firm cannot reach agreement, conducted a special two-day session in late August 2014, where many queries about payday lending were addressed via Twitter.

This follows on from the ‘PPI tweets day’ the FOS conducted in May 2014, another occasion where the FOS team answered questions on one specific topic via the social network for a limited period.

The first query concerned someone being pursued for a loan when they said they had never dealt with the lender in question. The FOS replied by saying that it received a lot of complaints regarding this, and advised the customer to both make a complaint and to contact Action Fraud.

Another customer said they had been allowed to roll over their payday loan some 26 times, which the FOS described as “shocking”. In reply, the FOS team re-iterated that a maximum of two rollovers is permitted under new Financial Conduct Authority rules.

Next, a customer was encouraged to complain about a lender’s debt collection methods. Customers were reminded that it is unacceptable for a lender to make debt collection calls to the borrower’s place of work, or to contact a relative about the debt.

Debt collection issues were raised a number of times during the two-day session. In response to another query, the FOS tweeted that

“It’s not on for a business to make repeated attempts to debit your account – and charge you each time for the privilege.”

Another issue covered was that of the lender not wishing to co-operate with the borrower’s attempts to arrange an alternative repayment plan. The FOS said that there could be grounds for complaint here on the basis that the customer was not being treated fairly.

Throughout the two days, the FOS also made repeated appeals for those experiencing debt problems to contact a debt advice charity. It said it took a “dim view
of any firm that either discouraged a customer from seeking debt advice, or failed to inform the customer of their right to appeal a complaint judgement to the FOS.
The number of payday loan complaints made to the FOS was up 46% in the 12 months to March 31 2014 when compared to the previous financial year.
Common issues in payday loan complaints include affordability issues, the impact of a loan on a person’s credit score, use of continuous payment authority and disputes over whether the customer ever actually took out a loan.