The 1,270 survey responses they have received since November show that a large proportion of payday lenders are failing to comply with the charter.
For example, only 35 per cent of respondents were asked questions about their personal finances and their general situation to check whether they could afford to pay back the loan
Just 18 per cent of respondents with repayment problems were dealt with sympathetically and positively. Of those consumers who struggled with repayment, just 16 per cent were offered a reasonable repayment plan.
The CAB offered some ideas for how lenders should proceed, such as:
- be willing to negotiate repayment plans when a customer contacts them because
they are in financial difficulties; and
- abide by the specific commitments on CPAs in the Charter.
- implement fully the new OFT guidance on the use of CPAs.
The CAB also recommended that the Financial Conduct Authority investigate banks which continue to refuse to cancel CPAs and take enforcement action where banks are refusing to make the necessary changes to their systems and processes.
