Category: Credit

What to Know about Payday Loans and Credit Brokers

If you’re looking for a short-term loan like a payday loan, you might consider using a credit broker to find one. Credit brokers are people who can help you to avoid paying unnecessary fees when you want to borrow money from any manner of different lending providers.

Credit brokers are simply firms that provide people with a service that focuses on finding the best possible loan for you in the market by seeing what might be available. A lot of credit brokers conduct their businesses using the internet, and they will charge a fee for the service that they provide.

The Problems with Credit Brokers

Many of the problems that have arisen with credit brokers in the past have emerged because firms have neglected to inform their customers that they’re credit brokers, and they continue to charge unauthorized fees for services that have not been provided. These fees are usually charged after people gave their bank details to the broker because they believed that they were using that information to confirm their identity or give the info for a credit check.

In these cases, the people involved were unaware that they were signing up to use a credit brokerage service. However, once someone had given out their personal details, credit brokers would be able to pass those details onto other brokers without the consent or knowledge of the customer. Those people would then find that they had been charged fees from other brokers for services that hadn’t been provided.

Another of the biggest issues with credit brokers today is that some have been working without registration under the financial conduct authority. Alternatively, they might have been trading under a different name, which made it hard for customers to get their money back or make a complaint to the financial services.

The truth is that you don’t need to use a credit broker to find a loan for a short term, or a payday loan. These days, it’s easier than you might think to compare the available options in the market. It’s important to remember also that the interest rates on payday loans can be very high and lead to debts that frequently spiral out of control. If you aren’t able to pay the loan back within the agreed time period, you could end up being deeply in debt.

How to Stop Unauthorized Payments Being Taken by Brokers

If you’re concerned that your credit broker is taking payments from your account without your authorization, or you are being charged for services that weren’t provided, then you will need to take steps to protect your finances. For instance, you might cancel the credit brokerage service. Under the financial services regulations that were laid out in 2004, you have fourteen days to cancel your services if you no longer want them. You will not have to give a reason why you’re cancelling the services, and you should be refunded any fees that you paid within thirty days.

If, for any reason, the credit broker in question has already begun to take regular payments out of your account, then you might have agreed to a CPA or continuous payment authority. The payment that is taken through these methods won’t show as a standing order or direct debit in your bank account, and the first thing you will need to do is ask the broker to cancel the order. If your broker will not do this, you should be able to ask your building society or bank to stop the payments.

Your bank will usually comply with your request. If you encounter a refusal, you will be able to insist that the CPA is cancelled because it’s your right to cancel instructions through your bank. However, if you do have any problems with cancelling a CPA through your bank or building society, you can file a complaint formally.

The Law Protects You from Credit Brokers

As of 2015, the law now protects people in the UK from being charged any unauthorized fees, and will require the credit broker to make it completely clear that they are offering a specific service for a specific payment. Additionally, credit brokers will not be able to charge fees or take payments from a client unless they follow the rules of the FCA. If you visit the website of a credit broker that content should show you how much their fees will be, and what the legal name of the firm is as well as their trading name. You will also be able to find out whether the firm is acting as a broker and not a lender.

Before a credit broker charges you any fees, they will have to send you information in writing confirming the details available to you, and ask you to acknowledge that you have received the information awarded to you.