Leading short-term loan firm warns consumers against rogue operators
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Consumers need to be on their guard against unscrupulous short-term loan lenders who are stealing money from people’s accounts.
The warning comes from Ferratum, Europes largest provider of payday loans, which says the growing demand for the loans is paving the way for rogue operators.Ian Porter, Sales and Marketing Manager with Ferratum UK, said:
We have heard horror stories from customers about bad experiences they have had with other operators.
One customer called the police after falling victim to a scam in which the payday loan company demanded £100 up front before they would process his loan. The loan never came but the company used his bank details to take further money from his account. It was only after the customer noticed the shortfall in his account that he called in the police who then launched an investigation into the company.
Rather than focussing on the bogus issue of high rates of interest, which are not relevant to short-term lenders such as ourselves, campaigners against the short-term loan industry would be better served trying to root out the small number of unscrupulous operators trying to cash in on one of the fastest growing financial sectors.
Ferratum has predicted that as many as two million people in the UK have taken out short-term loans during the past year.
And industry experts are forecasting that by the middle of this year that number will have risen to 3.5million. The vast majority of Ferratum customers are employed many holding good jobs and aged between 30-32. It is also the case that during the first six months trading in the UK, 60 percent of customers have been female.
Ian Porter added: Responsible lenders such as Ferratum have in place the most robust possible systems and processes which ensures that we only lend to customers with a good credit history. There are no upfront fees and we do not just credit check our customers when they apply for their first loan we continue to credit check them each time they apply to ensure that their individual circumstances have not changed.
The overwhelming message we are receiving from our customers is that they find a Ferratum microloan far more flexible and responsive to their needs than more traditional lenders. They have a short-term financial requirement perhaps only £100 or £200 to perhaps pay a utility bill or urgent car repairs so have no desire to take out more money than they need or have to repay over a longer period. This is responsible borrowing and lending in action.
Indeed, it is the more traditional lenders which should be held to account for encouraging their customers to borrow far beyond their particular requirement, not short-term lenders such as Ferratum which lend a specific amount which has to be repaid within a maximum of 45 days. The vast majority of customers repay well ahead of the 45 days.
It is because of these and other good practices that Ferratum is continuing to grow not just within the UK but globally with a presence now in 18 countries and further expansion planned for this year and beyond.