Consumers left behind by a credit broker Smart loans, who charged an upfront fee to secure loans that were never received, were told they could claim their money back, as it emerged that the financial ombudsman had been inundated with hundreds of complaints about the business.
Credit brokers have sparked controversy by targeting cash-strapped borrowers looking for payday loans. Those who use them are often unaware that a fee of up to £ 70 could be taken from their bank account for a ‘loan search’.
Some even find that they are hit with a series of fees when the details are passed on to other brokers, even though they have never received a loan.
Smart Loans, a trade name of Click4Profit Ltd, is the latest criticism from consumers who said they did not know they would be charged for using the site.
Gary Miller was looking for a loan of a few hundred pounds and didn’t know he was applying through a credit broker. “Next thing I know, Smart Loans is taking £ 68.50 from my account, although I never received a loan. I tried to contact this company but got no response.”
When he realized that this was part of Click4Profit, he contacted the parent company. “But they asked for a ‘receipt’,” he says. “I never received such a thing.”
Frank Reeves was looking for a £ 100 loan and applied for it on several websites. “I was directed to different websites after I typed ‘payday loan’ into the search engine.”
He decided not to take out a loan, but found that several sums had been taken from his bank account with various brokers, including Smart Loans.
Another direct lender that charges no upfront fees, Smartloan, said it has received more than 1,000 calls in the past three weeks from consumers trying to contact this broker.
Rob Westbury, of Smartloan, said: “These callers are in distress and were unable to contact the company that took the charges.”
He added that consumers often applied for loans through a range of different names and websites, but Smart Loans were listed as taking charges from their account.
The Financial Ombudsman Service said it has received hundreds of complaints about smart lending in the past two months.
“We have just started investigating these. It is too early for us to make a decision on what is going on here,” a spokesperson said.
Paul Williams, Director of Click4Profit, said: “We provide valuable service to our customers and the vast majority of the feedback we receive is overwhelmingly positive.
“For a small portion of our customer base who did not find our service useful, we are happy to issue a refund.”
He said customers can use the contact form on the smartloans.uk.com website, email [email protected], or call 0844 704 8622.
He said Click4Profit membership sites were clearly labeled and contained phone numbers and contact forms. “Customers should contact us through the contact details displayed on the site they used,” said Williams.
Citizens Advice wants the FCA, which took over consumer credit regulation in April, to be tougher on credit brokers.
Association CEO Gillian Guy said: “Dishonest credit brokers always pose as payday lenders to get their hands on people’s money. We need to take urgent action to stop brokers into devious credit to mislead consumers. “
A spokesperson for the Financial Ombudsman Service said there is no specific repayment program for people who have unintentionally paid a credit broker. “But the complaints process is the same as for any other regulated financial product. Complain first to the company, then if that doesn’t work, the ombudsman can step in.”