HARD-UP and vulnerable Isle of Wight residents taking out payday loans are being exploited by lenders who drain customers’ bank accounts without their permission, the Citizens' Advice Bureau (CAB) has warned.
Some payday lenders are using continuous payment authorities (CPAs) to get cash from customers without permission or warning and sometimes even after loans have been paid off, according to the CAB.
New national figures reveal one-in-three complaints about payday loans made to the CAB consumer service were because of CPAs.
Nine out of ten payday loan customers who complain about the controversial payment method could have grounds for a complaint for unfair treatment, according to the charity.
The CAB is also calling for tighter controls on payday loan advertising and is encouraging people to fight back and report irresponsible adverts.
The bureau said some adverts target the vulnerable, mislead consumers or focus on the speed rather than the cost of borrowing.
Many payday loan adverts use celebrity endorsements or focus on glossy lifestyles to hide the reality of life in debt.
Lee Hodgson, manager of the Isle of Wight CAB, said: "We see a whole range of problems from irresponsible payday lenders. We help people who have been the victims of fraud, given loans despite having no income and hounded by lenders at home and work. Now, we’re helping people to fight back.
"Misuse of CPAs can leave people without money to eat, pay rent or get to work, and can force people further into debt to stay afloat.
"If you’ve been badly treated and the lender hasn’t put right their mistake, then you can complain to the Financial Services Ombudsman."
"We’re also concerned about irresponsible advertising on daytime television, public transport, billboards and online. We want people to feel confident about reporting adverts which target people who are already in financial difficulty or mislead consumers by trying to cover up the true cost of loans."
If you have been affected by payday loans, contact our newsdesk on 01983 522210.