Many forms of short-term money lending have received a bad rep over the years. With unscrupulous practices, high interest rates, and a lack of regulation, practices like payday lending and doorstep loans have preyed on those in financial difficulty.
However, the market is changing, and companies are being held accountable. With that in mind, we take a look at the short-term lenders Cheque Centres, what payday loans are, and what happens if you go into debt.
Who are Cheque Centres?
Cheque Centres Limited (trading under the name Cheque Centre) was a payday loans company operating out of Edinburgh. Over the years, they grew to become one of the biggest payday loan firms in the UK, offering customers the option for short-term lending. They also took on debt collection activities on the loans they gave.
The registered office for Cheque Centres Limited in Edinburgh was Apex 3, 95 Haymarket Terrace, Edinburgh, EH12 5HD. The company Cheque Centre is now owned by Quick Loans Ltd, which has a registered address of Unit 12 Churchfield Court, Barnsley, England, S70 2JT.
Are they a legitimate business?
This is a complicated question to answer. As we’ll see, the history of Cheque Centres is long and varied, with a few scandals thrown in along the way. As it stands, according to Companies House, Cheque Centres Limited was dissolved on 6th July 2020. From 1996 onwards, it was a real company with the company number SC167596. It seems to be a different company from Cheque Centres Group Ltd, which was dissolved in 2018.
As mentioned, Quick Loans Ltd now owns the name Cheque Centre, and the private limited company was incorporated in June 2015 with the company number 09619094. According to Companies House, accounts for this company are overdue.
You can find the Cheque Centre website still offering loans to customers. However, a note at the bottom notes that ‘neither this site, nor our parent company Quick Loans Ltd has any links to the previous entity that owned the Cheque Centre.’
As for the Financial Conduct Authority, Cheque Centres were authorised with the reference number 223966 but no longer are. Quick Loans Ltd are still registered with the number 763132. They also have 22 trading names, as well as six previous names.
To make matters slightly more confusing, the FCA issued a warning about a fraudulent ‘clone firm’ using the same name and pretending to represent the actual company.
What is the history of Cheque Centres?
As you can probably tell, Cheque Centres has a chequered history. Despite rising to prominence in the payday lending market, there had long been reports of malpractice. They tended to use unscrupulous tactics when it came to both lending and collecting money. Customers and staff all had complaints about preying on those who were vulnerable, with APR rates of up to 3,873% on some loans.
In 2014, the company stopped issuing single instalment payday loans and debt collection calls after an investigation from the FCA. At this point, Cheque Centre had 451 branches across the country. However, a change in payday lending regulations meant that the company fell into difficulties.
By the summer of 2017, the company went into administration. This came after many customers complained they had been mis-sold financial products and had been on the receiving end of unfair debt collection practices. In 2018, Quick Loans Ltd purchased Cheque Centre, relaunching as an online-only service.
However, according to their site, they don’t offer loans directly. Instead, they lend money using Domain Names as security.
Why are they writing to or calling me?
There are several reasons why Cheque Centre may be trying to contact you. Perhaps the most obvious reason is that you’ve taken out a loan with them and haven’t paid it back. They may be trying to reach you to discuss repayment options. However, they could also have passed your details onto a debt collection agency.
On the other hand, there is a fraud warning on the Quick Loans website, which highlights a rising number of fraudulent calls. People are claiming to be representatives of companies such as Cheque Centre, offering cheap loans. However, they then ask people to pay money upfront. The fraudsters then simply take this money and are never heard from again.
So, if you’ve had a call from Cheque Centres, you’ll want to verify it’s real. No legitimate loan company, even the unscrupulous ones, will ask for a fee upfront. However, a letter from the firm demanding you repay your debt could well be real.
What are Cheque Centres reviews like?
There aren’t many reviews left online related to Cheque Centres from a customer perspective. However, as we’ve seen, the company was often criticised for its aggressive selling and debt collection techniques. There were several news stories, even before the FCA regulation change, outlining just how bad it was dealing with Cheque Centre.
There are reviews online from employees, however. These don’t paint a particularly positive picture of Cheque Centres either. On Glassdoor, you’ll find evidence of bullying behaviours to staff and customers. On this site, it has a rating of 2.5 stars out of 5. On Indeed, things aren’t much better. 11 reviewers give the company a 3.0-star rating. Many employees highlight the unfair practices when selling loans.
What is a Payday Loan?
So what exactly is a payday loan? It’s a term that’s often thrown around, and the industry has grown and changed significantly over the last decade or so. Essentially, a payday loan is a short-term loan, usually for a relatively small amount of money.
Companies online and on the high street offer such short-term agreements, giving customers the chance to keep financially afloat during difficult times. Usually, you can apply for this method of borrowing even if you have a poor credit score or are on a low income.
When it comes to online payday loan companies such as Cheque Centre, you can usually get a decision within minutes and have the cash within a short amount of time. Often, terms of the loan are restricted to up to 36 months.
Are they safe?
This really depends on the lender that you’re dealing with, and there are a few factors to consider here. The first and most important aspect is whether a firm is registered with the Financial Conduct Authority. This governing body makes sure that any firm offering financial services abide by a set of rules and regulations. You can check out the FCA register before dealing with a company to make sure they’re safe.
As well as the potential for fraudulent and unregulated lenders, you also have to consider how the firm operates. Although regulations are a lot stricter now, companies still tend to chase people for unpaid debts with a lot of force. It can be intimidating and worrying, so make sure to check out reviews beforehand.
Should I take out a Payday Loan?
There is no definitive answer for this, as it depends on your current financial situation and what the outlook is for the future. Although the prospect of an instant cash loan can seem appealing, there are certainly downsides to consider. For example, interest rates are still eye-wateringly high, even with the new regulations.
Ultimately, you should only borrow what you know you can afford to pay back. A payday loan might see you through until your next paycheque, but there could well be other costs and expenses that you need to cover when that arrives. As many people have experienced, payday lending can be a vicious and expensive cycle.
If you are considering a payday loan, you should do your research beforehand. Check out the rates, repayment terms, and reputation of the sites you’re considering and make an informed decision.
What are the rates for a Cheque Centres loan?
According to the Cheque Centre website, they offer loans up to £5,000, which is surprisingly high for this kind of lender. But how much would it cost you to borrow money through this company? Well, let’s take a look at the example on their website.
The representative APR for Cheque Centre is given at 59.9%. This means that if you were to borrow £2,000 with a repayment term of 12 months, you’d end up repaying £225.54 per month. After you’ve repaid the loan, this totals £2706.54, effectively meaning it costs you £706.45 to borrow the money.
As you can see, this is a fairly expensive way to borrow money. If you consider a credit card, for example, the average APR is just 14-15%. Similarly, the average for a personal loan is around 9.41%. However, not everyone is in the financial position to borrow at such rates.
Are there better options than a payday loan?
The appeal of payday loans is that they’re quick, convenient, and can often be taken even if you’ve a poor credit rating. However, there are plenty of better options. One of the main reasons for this is that short-term lenders will often offer you an extension for your loan, or even another loan to cover the initial cost. As a result, you’ll take longer to pay it back and pay much more in interest.
If you’re looking for alternatives to payday loans, you’ve got a few options. If you’re in a tight spot, a credit card can be a more affordable way of borrowing money in the short-term. Similarly, you could also borrow from a credit union, which puts caps on the amount of interest they charge.
There are plenty of local welfare schemes that can help too, whether it’s vouchers, pre-paid cards, or food banks. Similarly, you might be eligible for an interest-free budgeting loan from the Social Fund.
What happens if I don’t repay my loan?
The consequences for not repaying a loan can be significant. To start with, payday lenders usually try and take money directly from your account from 5am on the day payment is due. They’ll keep trying to collect the debt in that manner until they’ve recovered the full amount. However, you’ll likely face a fee every time they can’t collect, as well as around 1% interest each day you don’t pay.
For example, if you were to owe £100 in a payday loan but missed your payment date by two months, you’d then owe around £186.
You’ll also face the possibility of having to deal with a debt collection agency. Lenders will usually keep trying to reclaim the money you owe them for a while. However, if they make no progress, they’ll usually refer the case to a debt collector who will then take over the matter.
It’s stressful having to deal with debt collectors, and they can also add on fees and charges. If you continue avoiding them, you could even end up in court.
Are Cheque Centres a debt collector?
No, Cheque Centre is not a debt collection agency. However, in the past, they’ve chased debts owed by customers with a fair amount of aggression. There is little difference between dealing with a debt collection agency and your original creditor, however. Although they can’t harass you, they can be pretty persistent when it comes to recovering money.
Where can I get help dealing with my debt?
If you’re struggling with your debts, you’re not alone. There are several places you can turn to for help and advice in dealing with your financial situation. Below, we’ve highlighted some of the most useful services:
- Citizens Advice. If you’re looking for information about debt, as well as help and solutions, you can talk to someone from Citizens Advice. As well as in-person locations, they also offer an online service.
- StepChange. StepChange is a debt advice charity. They offer free, impartial advice via their online service. They also have a free phone number, which is 0800 138 1111.
- National Debtline. This organisation gives you a variety of options for finding advice and help with your debts. As well as an online chat function, they also have email advice and phone services. You can call them on 0808 808 4000.