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Credit broker issues treble

1 Rhagfyr 2014

Citizens Advice has been inundated with complaints about brokers who take cash from bank accounts and don’t even provide a loan. Calls to the Citizens Advice Consumer Service about these appalling practices by brokers have over trebled in July to September this year, compared to the same period last year.

The FCA announced new measures to protect consumers from harmful fee-charging credit broking practices today, which Citizens Advice has described as a much needed step, after it passed on a dossier of evidence.

Gillian Guy, Chief Executive of Citizens Advice said:

“Problems with credit brokers have trebled. People who are desperate for credit are being pushed further into financial hardship through broken promises and unauthorised charges. Some vulnerable customers are struggling to get to the next pay packet after being fleeced by these firms. The measures announced by the FCA today are vital for many consumers that have had awful experiences with credit brokers.

“Citizens Advice has been calling for these rip off middlemen to be totally transparent on services and fees. Our evidence shows on average people lost £118 in charges, rising to over £183 where more than one transaction is made. Only 3% were actually offered loans or had details passed to a lender. In one case 19 different firms had taken money.

“The FCA are right to impose enforcement action and new rules as this market needs a radical clean-up of bad practice. We are concerned about unacceptable marketing and the way customers data is traded. Many are struggling to get refunds as claims go ignored and people struggle to track down the companies involved.”    

Notes to editors:

  1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
  5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.