wHAT you hAVE AGREE TO WITH THE LENDER
They will tell you that you are required to repay the full amount repayable (including interest and fees) by the date specified. This may be listed as a loan maturity date.
Your lender may suggest that while they will be reminding you when you should complete your final loan repayment, they will point out that this is your responsibility and not their legal obligation.
You have the right to cancel the loan agreement within 14 days from the time that they accept your application and agreement.
Either party can inform the other party about the decision to cancel the agreement, but your choices will be specified in the terms and conditions. Some companies will allow this action by email, and others will require a physically signed letter. Where they send a letter to you (for any reason), in the post, it is assumed in law, that you will receive a letter within 48 hours of the posting, whether you received the letter or not.
Where you do cancel the agreement, you will still need to return the money they have transferred to your account, probably with the addition of an administration fee for their time and trouble.
If you don’t cancel the agreement within the 14 days, you won’t be able to cancel it at a later stage, but you will be able to end it by clearing the entire debt as agreed.
When you make an application for a payday loan, you are agreeing to enter an agreement with the lender and this creates a legal status between both parties.
Where you decide to end the agreement, the lender is obliged to let you know how much money you owe to clear the debt satisfactorily, and the exact date by which they need to receive the money. If you are late with a payment, they may add fees and further interest on the outstanding debts due.
The lender is allowed to cancel the agreement if they later find out that you provided false information during the application procedures.
FEES YOU MIGHT NEED TO PAY IF YOU DEFAULT ON THE LOAN
Where the lender needs to recover the debt from you, because you have not repaid by the agreed date, they will have listed the different choices open to them:
- To recover the money from you
- What they will charge for each set of circumstances and
- They will have explained what each of these mean in relatively simple English
To provide you with examples, and these may vary from lender to lender, these are a general list of the activities that may be taken by a lender to recover a debt from you:
- · Where you miss a payment by the agreed date, there may be an automatic missed payment charge of around £12.
- · Where you default on the loan completely, they may charge you a default charge of around £30.
- · Where the debt is not cleared by the maturity date, there may be a late interest payment applied. The lender will tell you how much this interest payment is per day, while the debt is outstanding.
- · If they have to telephone you or send you a text message, they may charge you around £3 to cover their time, and expenses. They may charge you this, even where they did NOT receive a reply and for each occasion when they make an attempt to contact you, because they have taken the time and energy to inform you about the status of your debt.
- · Where they have to write to you and post a letter, they may charge you around £5, because they have to recover the cost of printing the letter, even though it will be a stock letter held on their computer; the cost for someone to place the letter in an envelope, and arrange for it to be posted to you.
- · Where the lender is unable to recover the debt from you at this stage, they may take you and your debt to the County Court so that they can claim a judgement against you. When they have this judgement against you, agreed by a court, they are allowed to repossess your goods for the value of the outstanding debt. This is called a CCJ, commonly known as a County Court Judgement. The lender may charge you around £75 for this process. The court will also charge you around £80 as the court fee and if a solicitor represents the lender, they may charge around £60 for their time.
- · Where the lender is required to send someone to your property to recover goods to the value of the debt, they will charge a fee to cover the expenses of the recovery agent.
- · Where the lender decides to add an attachment of earnings, so that your employer will remove an agreed amount from your salary to clear the debt, before you are paid, and transfer it to the courts or the lender, the lender will charge you around £25 for this expense and up to or around £100 as an execution fee; in other words, to carry out the work.
- · Where the lender decides to make a statutory demand, which may lead to your bankruptcy, they will charge you around £40, provided that the amount they claim must be more than £750.
The lender will clarify that your loan is not secured against any of your property or other belongings.
Your lender will write a line in to the terms and conditions, which agrees that you have given them permission to contact your employer at any stage during your agreement with them, and/or the chasing of debt that has not been paid.
The lender will have agreed with you in advance, that they may reassign the debt to someone else, who will chase you for recovery of the standing money.
To meet legal requirements, the lender will specify their company name, the nature of their business, the body that regulates them and their official address for contact – as well as who you can complain to with details about the complaints procedure.
Where you should wish to complain about the lender, they will provide you with information about the Financial Services Ombudsman Scheme or any scheme that replaces this in the future. In law, you are given up to 6 months to complain after you have exhausted your complaint with the lender and received their final response.
They can look into complaints covering a variety of financial problems, but not everything. Here are the areas (listed on their website) that they can help members of the general public with;
- PPI (payment protection insurance).
- Credit cards and store cards.
- Loans and credit
- Payday lending and debt collecting
- Pensions, savings and investments
- Hire purchase and pawnbroking
- Money transfers
- Financial advice
- Stocks, shares, unit trusts and bonds
WHERE THE LAW IS APPLICABLE
The terms and conditions will state which country or countries will form a jurisdiction for a court to hear the case between you and the lender, for when a debt problem reaches that stage.
There will also define that all communication between you and the lender will be in English unless you have made separate arrangements with them.
They will slip in a clause which tells you that you must provide them with any details of any changes to your name, address or employment or any other circumstances that relate to your ability to meet your loan repayments in agreement with the deal offered to you.
YOUR DATA AND HOW IT MAY BE USED
The lender will tell you how they will share any of the data and information taken from your application and the manner in which you manage your repayments with them, stating that they may search or record data with credit reference agencies, although the majority of payday loan lenders may not carry out this action.
Should they search any known addresses for you, they will also look at the data and information of anyone who resides at your address to decide whether that person is associated to you, and should be taken into account when they make their loan decision.
The lender will check your details with any fraud prevention agencies to see if you have a track record of providing inaccurate or false information. This information may be shared with companies that deal with credit, loans, insurances like vehicle and household and any life assurance applications.
The lender will tell you that their decision about your ability to repay the debt may be based upon checking any or all of these agencies.
They will feel free to share any information with the police and HM Revenue and Customs, where necessary.
They will make you aware that any searches they conduct with an agency will appear on your credit file, whether they decide to lend you the money or not.
They will also inform you, which potential agencies may be used so that you will have the full contact information should any data appear incorrect, so that you have the opportunity to be able to correct the details, because incorrect facts may lead to you being refused finance with the same company or others.
Finally, you will agree that any sensitive information you have passed to the lender, during the application period, such as information about criminal convictions and health details, may be used and shared with the agencies that they list in detail.
You will be signing the agreement to confirm that you have told the truth and that the whole application is based upon the details you provide, agency checks and any other information that you supply during the application process. The terms and conditions will certainly provide the lender with any opportunity that can to assess your ability to pay and then clear the debt exactly to the terms of the offer.
Essentially, it is your responsibility to understand the contract that you are going to agree to and if there are any areas that you don’t fully understand, you should take advice until you can easily understand what you are agreeing to - before you take out the loan and receive the funds.