More than 10,000 people have complained to the Financial Ombudsman Service (FOS) since the start of 2014 regarding middleman websites that take large sums from customers for credit deals that do not materialise.
In some cases, the consumer’s bank details were passed on to other credit broking websites, resulting in their bank accounts being debited multiple times without warning.
Many people were unaware that they were on a credit broking website, instead believing that they were applying for a loan directly. In a third of cases the fees had been refunded, and in the remainder the ombudsman agreed that the consumer had been treated unfairly.
Senior ombudsman Juliana Francis commented:
“It’s disappointing that people who are already struggling to make ends meet are being misled into thinking that these websites will get them a loan.
In too many of the cases we sort out, no loan is provided and people’s bank accounts have been charged a high fee, often multiple times.
If money has been taken from your account unfairly or without warning, the good news is the ombudsman is here to help.”
This kind of case is not uncommon, as Amanda Smith of Ask Finance describes:
“Sadly we hear stories of these practices on a daily basis. Consumers are duped into thinking they are directly on a lenders website and think entering their bank account details will be safe. It’s not until they have been charged a fee, sometimes multiple times, they realise their mistake.
These companies are very clever with their websites often showing the relevant licence numbers. Consumers need to check those numbers on the regulated bodies website before proceeding.
These are appalling practices which can leave consumers in a desperate situation. Taking the last funds from a persons’ account leaving them unable to pay important bills, such as mortgage or rent.
At Ask Finance we always advise consumers never pay any upfront fees. Any reputable company will be able to source you a loan without the need for you to make any upfront payment.”