Responding to the FCA report which found that some payday lenders’ customer communications are ‘unclear and misleading’, Judith Donovan CBE, Chair of the Keep Me Posted campaign, said:
“It is worrying that that payday lenders are not providing clear information to their customers about their debts, and that they are implying legal action when this is not the case. A major piece of behavioural research by Keep Me Posted showed that customers understand financial information sent to them on paper far better than when it is online, and therefore make better financial decisions as a result.
“We urge payday lenders to send customers get clear, upfront information on paper whenever they take out a payday loan to help people manage their finances. We would also welcome FCA action to protect the consumer’s right to choose how they receive bills and statements.”
For the Notes for Editors:
1) The FCA report on payday lenders (Arrears and Forbearance in High-Cost Short-Term credit) found that:
Firms’ communications with their customers were sometimes unclear or misleading.
• Some firms implied that customers’ accounts would be subject to legal or other action, including escalation to a third party debt collector, when this was not the case.
• Some firms provided customers with misleading information about the consequences of their actions, or inaction, for their credit file
The report is available here: http://www.fca.org.uk/your-fca/documents/thematic-reviews/tr15-03
2) In February 2015 Keep Me Posted published the results of a major behavioural study which looked at how well people understood financial information that was sent to them online and by post called ‘Managing money online – working as well as we think?’ 2,399 people participated in the study; half of participants received a paper statement and notice of changes and half received the information online. This study showed that those who received a paper bank statement were more likely to understand the information they were given, take appropriate actions, and make better financial decisions as a result.
The executive summary of the report is available here: