Debt Hacker has Consumer Credit Trade Association quaking in its boots
The Debt Hacker campaign may have only started in earnest three days ago, but it seems the Consumer Credit Trade Association (CCTA) is already quaking in its boots.
It’s rewarding to see that our work is paying off.
CCTA Chief Executive Greg Stevens seemed keen to distance himself from payday lenders when up against me on Radio 4’s You and Yours on Thursday lunchtime.
But the CCTA have now come out swinging against our campaign to make sure irresponsible lenders pay back those who have been mis-sold loans.
Those taking out payday loans are often amongst the most vulnerable in our society, made yet more vulnerable by extortionate interest rates on loans that they never had a hope of repaying.
This industry is actively hurting these people. Credit should be something that helps, not something that harms.
Time and time again I have heard highly-personal stories of people who took out payday loans and found themselves in a spiral of debt.
Borrowing more and more from lenders to service the interest on debts. Borrowing from QuickQuid to pay Wonga, then borrowing from Sunny or Lending Stream to pay QuickQuid.
Initial loans can go from hundreds of pounds to thousands in a matter of months, with lenders sometimes upping the loan amounts until it exceeds a person’s monthly wage.
But the CCTA seem to think that the only irresponsible ones in this picture are those in debt and our campaign.
The CCTA has claimed that Debt Hacker is encouraging spurious claims against payday lenders.
This, put quite simply, is rubbish.
It is true that we have had hundreds of people submit complaints against lenders since the tool went live. But the lenders have had plenty of time to prepare for and even expect these claims.
Far from encouraging spurious claims, Debt Hacker is providing people with all the help they need to make a successful complaint about mis-sold, unaffordable loans.
Loans that should never have been sold to them.
If lenders settle these legitimate claims in a timely manner, then they will not have to pay the £550-per-claim fee to the Financial Ombudsman Service that seems to be upsetting Mr Stevens and the CCTA so much.
Yes, this will have an adverse effect on the sector. But this is because the high-cost lending sector is predicated on a business model that relies on making loans that people can’t afford to repay. This must end.
People need access to affordable, responsible credit, not credit at any cost. If companies cannot offer this then they should not be operating.
We are pleased that the CCTA acknowledges that we have a great tool for the submission of genuine complaints.
But we are not so happy that the CCTA seems to be alleging that many of the claims coming via our tool are false.
This may be true of a small number of claims coming from profit-making Claims Management Companies (CMCs) that exist to make money from borrowers. But we offer a free service that exists solely to help those exploited by the high-cost lenders that the CCTA represent make genuine complaints.
We’re not here to make money. We’re here to change the industry.
Although I should point out that even existing CMCs seem to have hit upon a 72% success rate with Wonga claims, 69% with QuickQuid and 65% with Sunny.
Hardly a sign of Mr Stevens’ “deluge of false complaints”.
Besides, we are also only targeting the largest high-cost lenders, so smaller, ethical lenders are not caught in our net, as happens with claims houses.
The CCTA further claims that “consumer activists in consumer credit are having relatively free rein to concoct their storylines and spin”. Which is a funny way to say that we are helping vulnerable people get money back that is rightfully owed to them.
We want people to have access to responsible loans and affordable credit, which is why we have been lobbying the government to protect responsible lenders against CMCs.
We want to see growth in the ethical, responsible credit sector. It’s only the exploitative high-cost lenders we want to see go.
And we’re not afraid to say good riddance.