Are Little Loans UK contacting you about an outstanding loan? Are you unable make payments to your loans? Are the loan company threatening to take you to court to recover the money? Should you never have received the loan in the first place, as you weren’t in a position to pay it back? If these issues are affecting you with Little Loans UK, you should read this article, as it is designed just for you. 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.
Who are Little Loans?
Little Loans is a registered loan broker in the UK. Loans of up to £5,000 are available with a repayment period of up to three years. The company processes more than 2000 applications a day and offers a quick application process with instant results.
Read what to do if you can’t pay back your debt.
Is it too easy to borrow money?
It can be extremely easy to borrow money, and many lenders are crying out for people to do so. There are companies all over the internet who promise ‘instant cash in minutes’, ‘loan approved in seconds’, and other messages which are designed to entice people to take out a loan. There are even loans available to people who have extremely bad credit and who have had problems repaying loans in the past.
What causes debt problems and what the government is doing to protect borrowers
Debt problems have become out of hand in recent times, as a result of loan companies charging excessive interest rates and fees, as well as lending to people who should never have received a loan in the first place. The loan market toppled £2 billion at one stage, which is why the government were forced to step in and take charges of the escalating problems. They did so by issuing fines to those companies who were found to be acting irresponsibly with their lending.
The Financial Conduct Authority identified a number of unfair practices by some of the biggest companies in the industry, including The Money Shop, Wonga and Quickquid. Their underhand behaviour cost them greatly, as some of them were hit with massive fines, including Wonga, who ended up being fined £220 million. A value which, unsurprisingly, put them out of business. As they were lending to people who could not afford to pay back the loans, the customers ended up with refunds. Over the years since there tighter regulation, the situation has greatly improved, and loans decreased from 10 million to 1.8 million.
Are you due a refund? Read through the next section in which we look at these new rules in some detail. If Little Loans UK is in breach YOU MAY BE DUE A REFUND EVEN IF YOU HAVE PAID OFF THE LOAN.
Loan interest and other charges – government caps
Price caps have been introduced by the Financial Conduct Authority, which are designed to protect borrowers from facing excessive charges. The price caps are made up of:
- A 0.8% cost cap per day on the value of the amount you have borrowed – this is combined of both interest and all fees which have been charged.
- A £15 default fees cap, where a default interest may still be charged, but it cannot be in excess of the original 0.8% per day.
- 100% complete cost cap – you should not be asked to pay over 100% of the loan amount you have borrowed.
The limits are relevant to all credit agreements with an interest rate of 100% or more per year and that will be required to be fully or substantially repaid in a year.
There are other regulations which have been applied since May 2017. With these new regulations, lenders must provide their products on a price comparison website, which must be authorised by the FCA and borrowers should always be provided with a summary of what they have borrowed.
If Little Loans UK is failing to adhere to the regulations and they are trying to charge you more than they are permitted to, the credit agreement with them becomes unenforceable and they cannot make you repay the loan.
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 who pretend to be authorised, when in fact, they have no legal right to chase you about your debt. Authorised businesses can make credit agreements, but those without authorisation, have no legal right to do so. In short, if they are not authorised, they can’t make you pay up. If you decide not to pay anymore, there is nothing they can do.
If you are worried about the authorisation of Little Loans UK and want to check, there are various ways you can do this. You can check by searching their name on the Interim Permission Consumer Credit Register, or you can also check via the financial services register. In cases were there is no valid entry which is up- to-date, you can just stop paying.
There are other indicators which suggest that Little Loans UK may not be working in a legitimate way. They may have no information on their website, or it might be out of date. In some cases, the APR might not be forthcoming. It is important to ensure that the company is authorised, before you make payments.
Do you want to complain about Little Loans UK?
If you feel that Little Loans UK are breaching the regulations, and they are failing to treat you fairly, you have the right to make a formal complaint. Little Loans UK should deal with your complaint within eight weeks, and if they fail to do so, you may contact the Financial Ombudsman and escalate it. They will then take it over and deal with it on your behalf.
Obviously making a complaint is not as simple as just saying you wish to complain. You must have solid evidence to back up the complaint. This may include letters, emails etc, or even phone calls. For example, if you have received an excessive amount of telephone calls, you may want to take a screenshot of your call history as evidence to support the claim.
Little Loans UK have a responsibility to take the complaint seriously, and if they fail to provide a conclusion which meets with your needs, it is your right to take it to the Financial Ombudsman, who are there to help support you. You can reach them by phone on either 0800 023 4567 or alternatively, they are also available on 0300 123 9213.
If they are found to have treated you unfairly, you may end up with a refund, even if the loan has been paid off within six years. You can expect to not only get a refund, but also any interest you have paid, and additional charges. You can receive 8% interest on the payments you have made. It is worth making a complaint if you feel you have the right to do so.
They may find that the loan has been unaffordable, and you should never have been given it in the first place. In which case, it could even be removed completely from your credit record, and any remaining balance on the account could also be cancelled.
You can write to your lender in the first instance, and request that they provide you with compensation.
If there is no satisfactory response within 8 weeks you may want to follow up with the Financial Ombudsman by phone on 0800 023 4567 or 0300 123 9123.
Continuous Payment Authority – the rules
You may not be aware of this, but many loan companies use a CPA or Continuous Payment Authority to recover the debt. With a CPA, the loan company has permission to be able to take payments from your account, whenever they wish to recover the full value of the debt. They should advise you prior to doing this, but many of them fail to do this, and the result is that you end up with money being taken out unexpectedly. Sometimes even to the point that you are left with no money in your account.
This can, and has been known, to leave borrowers with no money to pay for the essentials, including the mortgage, rent etc, and as you cam imagine, this can be catastrophic for people. In some cases, people have been left unable to buy food, and their homes have even been put at risk.
There are new regulations regarding CPA, which go a long way to helping to protect borrowers. The new regulations state that loan companies must not attempt to take the payment on more than two occasions. If it fails, they cannot make any further requests, unless you have given them explicit permission to do so.
In addition to this, there are new restrictions on the amount of money which can be taken using a CPA. You cannot take partial payments, only full payments are permitted. If you do not have the required amount of money in your account, they simply can’t take any payment at all. Of course, if you agree otherwise, this is different, but you must give them explicit permission to do so. There are consequences if they are found to be in breach of these regulations.
If they make more than two requests for payment, or they take a partial payment, and you have not given them permission to do so, they are in breach of regulations. In this case, you will be able to report them to the financial ombudsman, who are available to speak to on 0800 023 4567 or 0300 123 9123.
I can’t afford to repay the loan – what now?
If Little Loans UK are operating in a legitimate way, and you have no grounds to make a complaint, but you are concerned about making payments, there are some steps you can take, even if you already have a payment plan set up.
In cases were you are paying via a CPA, or you have a standing order or direct debit set up, you can contact the bank and cancel them. Little Loans UK cannot try to take any more payments, and you will be able to take back control of your account. They may advise that you speak to Little Loans UK and let them know your intentions, but you are under no obligations to do this. Even if you don’t, they will not be able to try and collect money from you again, unless you give them permission.
Whether or not you take this action, you still owe the money regardless. So, just because you have stopped the payments, it doesn’t mean the debt is wiped from your account. It is important that you speak to Little Loans UK and let them know your financial situation, and reasons for not being able to pay. They should treat you fairly and devise a plan with you, which accommodates both parties. They can change the payments to some time in the future, for instance.
The law is there to protect borrowers, and according to this, lenders have a responsibility to:
- Provide information on where you can obtain free independent debt advice, if required.
- Halt debt recovery for a period of time which gives the borrower an opportunity to develop a repayment plan.
- Freeze any interest and charges where applicable, and where it will help the borrower make repayments.
It’s a rollover! Or is it?
Little Loans UK may say that it is within your interest to roll the loan over to the following month, but if you do this, you will accrue additional charges, which inevitably means you will end up facing further debt problems. You cannot roll a loan over more than twice, but it is a good idea to set up a repayment plan instead, as this is more cost effective in the long run!
Getting free support with your finances
There are a range of organisations that offer free independent advice on debt, and taking control of your finances, and these include:
- Contact Citizens Advice – free debt advice, as well as help with a range of other personal issues.
- Contact StepChange Debt Charity – free debt advice and support on getting your finances back on track.
- Contact National Debtline – free help and advice on taking care of your debt.
Are all loan companies unreasonable?
Loan companies always have a bad reputation, regardless of whether they deserve it or not. Of course, some long companies do not act in a credible way, but many do, and they don’t all just think of their profits. Some lenders will take a considered approach when lending money, and will ensure that the borrower can realistically afford to pay it back, before they hand any money over. Of course, this can be frustrating for those who get declined, but in the long run, it saves them from getting into even more debt.
However, if you do find that Little Loans UK have been in breach of the regulations, and have either acted in an abusive and threatening way, or they have given you a loan you can’t afford to pay back. You can make a complaint. It is worth contacting one of the free organisations mentioned above if you are facing a hard time financially, as they are there to offer you the support you need.
If you can’t pay back your loan do check out my other article here.