Are you being contacted by Globo Loans UK about an outstanding loan you have, and perhaps forgot about? Do you have loans, but are unable to repay them? Are you being threatened about court action? Was the loan unaffordable at the time you took it out, and you should never have been given it in the first place? If these problems with Globo Loans sound familiar, then this article should hopefully provide you with some useful information. You might be able to cancel your loan and even obtain a refund.
It’s not your fault. Complaints to the Financial Ombudsman have risen this year from 830 to 2,006, so it’s safe to say that you’re not alone.
Deal with your debt today and feel better tomorrow.
Read what to do if you can’t pay back your debt.
Is it too easy to borrow money from lenders these days?
It can be far too easy to borrow money these days. There are so many loan companies out there, who will give you access to cash within minutes, and will promise to approve loans up to as much as £1,500 in seconds. They use enticing slogans to make it impossible to resist, especially for those who are short of funds. In many cases, loans are offered to people who will, most certainly, face issues paying them back.
What causes debt problems and what are the government doing to help?
With lenders providing loans to people who clearly can’t afford it, it is no wonder that debt problems have become so bad over the years. The loan business started to get out of control at one point, which is why new regulations had to be introduced. At one stage, the loan market was worth over £2 billion, and this was caused by lenders failing to check the affordability of borrowers, as well as high interest rates..
The Financial Conduct Authority conducted some research into lending companies, which resulted in fines being issued, some of which were so high that they put lenders out of business. These companies included Wonga, who were fined £220 million, as well as The Money Shop and Quickquid. Customers also received a refund in many cases, when they had received a loan which they could not afford. This worked though, as the number of loans has dropped from 10 million to 1.8 million. Lenders also fell from 240 to 60. The government have regulations in place now, which are designed to protect borrowers.
Are you due a refund? Read through the next section in which we look at these new rules in some detail. If Globo Loans UK is in breach YOU MAY BE DUE A REFUND EVEN IF YOU HAVE PAID OFF THE LOAN.
What are the Government caps on loans and interest?
As a consequence of the irresponsible lending, the Financial Conduct Authority had to introduce price caps which were designed to protect borrowers from being charged excessive amounts of money. The caps include:
- A cost cap of 0.8% on the value of the loan borrowed each day which includes interest and fees
- Default fees cap of £15. Interest can still be charged after a default, but lenders are not permitted to charge more than the original 0.8% rate per day.
- 100% complete cost cap. You should not be asked to repay over 100% of the loan you have borrowed.
The limits are applicable to credit agreements with an interest rate of 100% or over per year, and that will be due to be fully or substantially repaid in a year.
There are other regulations which were enforced in May 2017. With these new regulations, lenders are required to provide details of any products on a price comparison website, which must be authorised by the FCA. Borrowers must also receive a summary with the cost of borrowing.
If Globo Loans UK are breaching the regulations and they are trying to charge you more than they should, the credit agreement will become unenforceable and this means that they cannot enforce the debt.
Find your best debt solution (in 1 minute!)
Is all this information starting to feel overwhelming? Don’t panic! I’ve put together a 4 question debt calculator so you can quickly and easily find the best solution for you. If you’re eligible for the new government scheme, you could write off up to 85% of your debt! Answer the four questions now.
Believe it or not, there are loan companies out there who are not authorised to chase you for payments, but they do so anyway. If they are not authorised, it means they do not have a legal right to make credit agreements, which means they cannot enforce the payments. If you stop paying them, there is nothing they can do.
Are you looking to check whether Globo Loans is authorised? You can simply enter the name of the company on this Interim Permission Consumer Credit Register search page, or alternatively, search the financial services register here. If you cannot find a valid entry on either of these registers, you have the right to stop paying them, and they have no power to enforce it.
There are some other strong indicators that Globo Loans UK might not be acting lawfully. There may be a lack of detail on their website, or the information may be out of date. It could be different from the information on the directories. If you cannot see the APR on the directory, this is another strong indicator that Globo Loans UK may not be authorised.
Do you need to make a complaint about Globo Loans UK
Do you believe that Globo Loans UK are in breach of the regulations? Are they treating you unfairly or even harassing you for payment? In the first instance, you should make a complaint directly to them about the behaviour. If they fail to resolve the issue within eight weeks, you have the right to escalate it to the Financial Ombudsman.
In order to make a complaint, you should have evidence to support it. This may include a list of phone calls they have made to you, emails or letters. To make the complaint, you should send it in writing, with the word ‘complaint’ at the top. It is also useful to state how you would like them to resolve it. Are you requesting compensation? It is a good idea to state this.
If you do not receive a conclusion which you are satisfied with, you may wish to take your complaint further, to the Financial Ombudsman. You can do this by contacting them on 0800 023 4567 or 0300 123 9123.
If it is the case that Globo Loans UK have not treated you fairly, you might be able to get a refund, even if the loan has already been paid off. If this is the case, you will also receive a refund on the loan you have paid, as well as additional charges. You may also receive up to 8% interest on any payments made.
In cases, were the loan is found to have been unaffordable to you, you can request that Globo Loans UK removes it from your credit record, and the balance outstanding may also be cancelled.
You should write to the lender, with your case and request that they give you compensation.
If there is no satisfactory response within 8 weeks, you may follow up with the Financial Ombudsman, who you can reach on 0800 023 4567 or 0300 123 9123.
Continuous Payment Authority – what it is and the new rules
You may not be aware of this, but in most cases, loan companies will have you repaying your debt using a Continuous Payment Authority (CPA.) With a CPA, the company can take money from your account to pay off your debt, whenever they want. This means that they may take it at the most unexpected times, and in some cases, this could leave you with no money to pay bills and other expenses. The loan company should let you know when they will take the payment, but many fail to do this.
If you are in debt, it is highly likely that you are already struggling to make payments, including your rent, mortgage and utility bills. If Globo Loans UK take payments from your account before these are paid, it could leave you in a situation where you could lose your home – in the worst case scenario.
Thankfully, new regulations have been introduced regarding CPA, which are designed to protect borrowers. With these regulations, loan companies must not try to take the payment on more than two occasions. If the second attempt fails, they must not try again.
Other rules are related to the amount of money they are permitted to take. They cannot take partial payments, it must be the full payment or nothing. If you do not have the funds in your account to cover the full sum of the debt, they cannot take anything. You can agree to make up the loan payment through partial payments, but you must give permission in advance. If they do this, they are in breach of the regulations.
If more than two requests are made for payment, or a partial payment is taken, which you have not given permission for, Globo Loans UK are breaching the regulations. In this case, you may want to consider reporting them to the Financial Ombudsman on 0800 023 4567 or 0300 123 9123.
Can’t afford to pay back the loan?
If Globo Loans UK have followed the regulations, but you cannot afford to pay the loan back, there are some thing you can do to deal with the situation. If you already have a CPA, standing order or direct debit set up, you have the right to cancel this with your bank, either in branch or online.
If you do this, Globo Loans UK will not be able to continue to take payments off you, so you have that much-needed control back of your own bank account. It is likely that your bank will advise you to speak to Globo Loans UK and let them know you have cancelled the payment. You don’t have any obligation to do this, but it is a good idea to do so. When you cancel the payment, they cannot continue to take payments from you.
Cancelling the payment does not mean you no longer owe it. You will still be responsible for the payments so you should come to an arrangement with Globo Loans UK to pay it back. Speak to them and advise them of your financial situation. They need to treat you fairly, and should be willing to reach an arrangement which will support your financial position. If they don’t, you have the right to make a complaint.
Lenders have a legal obligation to do the following:
- Provide information on where you can get access to free independent debt advice
- Postpone debt recovery for a reasonable period of time while you devise a repayment plan, using a debt adviser if applicable
- Give you a reasonable amount of time to repay and possibly freezing interest and any additional charges.
Why you shouldn’t roll the loan over
It may be suggested by Globo Loans UK that you roll your loan over, but this is not a good idea. The reason for this is that the more you roll the loan over, the more interest and charges it will gather, which means more debt for you. It is better to reach a repayment plan with the lender.
Getting debt help
Thankfully, there are a range of organisations who free independent advice on debt. These are some of them:
Can you trust any loan companies?
Loan companies have a bad reputation, but they are not all out to get you. Some loan companies also offer a service which is valuable to those who need it most, especially those who are unable to get credit from a bank or other financial institution. The problem is that there are too many loan companies who prey on vulnerable individuals and exploit them to make a profit. Thankfully, there are regulations in place to try and reduce these issues, but debt problems are still a problem for many.
If you have found that Globo Loans UK are breaching the regulations, you may not have to pay them, and the debt will not be forceable. If they have not been in breach of the regulations but you just can’t afford to pay them, it is best to either come to an arrangement or to contact one of the free organisations for debt advice.
If you can’t pay back your loan do check out my other article here.
John (Money Nerd)