Are you being hassaled by Money Box Loans UK about an outstanding loan? Are you finding it difficult to pay back your loans? Are you receiving threats about court action or home visits from baillifs? Do you feel that the loan was unaffordable and you should not have received it in the first place? If you are having these types of issues with Money Box Loans UK, this article should give you a better understanding of what to do next. You might be able to cancel your loan and even obtain a refund.
Who are Money Box Loans?
MoneyBox Loans offers short-term loans of up to £800, however first-time applying customers are limited to £200. If these loans are also referred to as payday loans and are required to be paid back within 28 days. The company is a trading name of Active Securities Limited and is a registered lender in the UK.
Read what to do if you can’t pay back your debt.
Are loan companies lending money to the wrong people?
It could be said that it is far too easy to borrow money through certain lenders. The internet is packed full of companies who are only too happy to advance you cash within a few minutes or to approve your loan application of up to £1,500 in just seconds. They may even say that they will give you an advance you without even undertaking any credit checks. The irresponsibility doesn’t end there though, some debt collectors promise to lend money to those with a “Very Bad Credit” history or who are already struggled to pay back their loans.
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Why you might suffer from debt problems and what the government is doing to deal with loan sharks
It is not surprising that there are so many people who are facing debt problems with these organisations. Although all is still not perfect in this respect, the situation has improved from where it was a few years ago. Prior to the new regulations coming into force, the loan business was getting out of control, as were the debts of many. At one stage, loan market was worth over £2 billion, and this was a combination of irresponsible lending and astronomically high interest rates.
Unfair practices were found by the Financial Conduct Authority, which resulted in massive fines being imposed on many top players within the lending industry. These include Wonga, who were fined an astounding £220 million; and others, including The Money Shop and QuickQuid were also fined staggering amounts. This resulted in some of these lending companies being completely put out of business.
In addition, if the money had been found to have been given to people that should never have received a loan due to their “limited criteria” the customers were given a refund. The punishment worked. Following the three years from the regulation, the amount of loans being issued, dropped from 10 million to 1.8 million and the number of lenders also decreased from 240 to 60.
Are you due a refund? Read through the next section in which we look at these new rules in some detail. If Money Box Loans UK is in breach YOU MAY BE DUE A REFUND EVEN IF YOU HAVE PAID OFF THE LOAN.
Government cap on interest and other charges
The Financial Conduct Authority has introduced a price cap which was brought into place to protect borrowers from excessive charges. These include:
- A cost cap of 0.8% per day on the total loan amount – this includes interest and all fees charged.
- A cap on default fees of £15 – interest may be charged after a default, but it cannot exceed the original rate of 0.8% per day.
- A complete cost cap of 100% – you should not be asked to pay back more than 100% of the money you have borrowed.
The caps on the interest and charges are relevant to all credit agreements with an interest rate of 100% or more a year and they should be due to be fully or substantially repaid within a year.
There were also other regulations which came into force in May 2017. With these new regulations, lenders have a responsibility to give details of their products on a price comparison website, which must be authorised by the FCA and borrowers must also be given a summary of the cost of borrowing.
If Money Box Loans UK are failing to adhere to these regulations and they are trying to charge you more than they are entitled to, your credit agreement will become unenforceable and this means they cannot make you repay the loan.
Is Money Box Loans UK authorised to chase payments?
Believe it or not, there are many so-called loan companies who are doing business when they are not authorised to do so. Only authorised businesses are have the right, by law, to make certain credit agreements. If they are not authorised, they would not be able to enforce repayments. This means that you could just stop paying them and there would be nothing they could do about it.
To check whether Money Box Loans UK is authorised, you can simply enter the name of the company on this Interim Permission Consumer Credit Register search page. You may also wish to search the financial services register here. If you find that there is no valid up to date entry on either of these registers, you may just stop paying them. In this case, they would not be able to enforce the debt.
Some of the other signs that Money Box Loans UK may not be operating legally, include a lack of information on their website, or information on the website that is out of date or it appears to be different to the information on the two directories. Non-disclosure of true APR is another clear sign that Money Box Loans UK may not be above board.
How to complain about Money Box Loans UK
If you feel that Money Box Loans UK are in breach of the regulations and they are treating you in a way which you deem to be unfair, you can make a formal complaint, and if they fail to resolve the complaint for you, or they do not deal with it within eight weeks, you may wish to take it further by escalating your complaint to the Financial Ombudsman.
To make a complaint, you should get together all the evidence you have relating to this, including any phone calls, emails, texts and messages you have received. You can write to Money Box Loans UK with a heading on the letter with the word Complaint. It is important to have as much detail relating to the complaint as possible. You can also let them know how you would like them to deal with the complaint. Are you seeking compensation? If so, make sure this is on your letter.
If Money Box Loans UK do not provide you with a satisfactory conclusion within the required time frame, you can escalate your complaint to the financial ombudsman. The best way to contact them is by phone on 0800 023 4567 or 0300 123 9123
If Money Box Loans UK are found to have treated you unfairly, you might be entitled to receive a refund, even if the loan has been paid off within the last six years. If this is the case, you have the right to be refunded all the full interest that you have paid on the loan together with any additional charges. You may also receive 8% interest on these payments.
If the loan is considered to have been unaffordable at the time you received it, you can insist that they remove it from your credit record and that they also cancel the outstanding balance.
In the first instance, you should write to your lender stating your case and asking for compensation.
If there is no satisfactory response within 8 weeks, you can follow it up with the Financial Ombudsman by phone on 0800 023 4567 or 0300 123 9123.
New rules regarding Continuous Payment Authority
Most loan companies will try to get you to repay the debt through a Continuous Payment Authority (CPA). With a CPA, the lending company will have permission to take as much as they wish from your bank, at any time they wish. They should let you know prior to debiting your bank account, but many of them do not carry out this extremely important step. The end result of this is that you end up with payments being debited without prior warning.
If you are already find it difficult to take care of important payments such as your rent, mortgage or utility bills, this could really push you over the edge. The money could be taken by Money Box Loans UK before you have had a chance to pay these bills, and as a result, you could end up in serious financial trouble, even putting your house at risk.
There are new regulations in place regarding CPA, which are designed to help protect borrowers. The new regulations state that if the CPA fails on two occasions, the lending company cannot make any further requests.
There are also rules around the amount of money the lender can debit using a CPA. They are no longer permitted to take partial payments. This means that if you don’t have enough money in your account to cover the full amount of the payment due, they can’t take any payment at all. You can agree that they may take a partial payment, but they must have prior permission in advance to be able to do this.
If you determine that they have made two requests to take the payment or they take a partial payment without your explicit permission, they will be in breach of regulations. You may report them to the financial ombudsman on 0800 023 4567 or 0300 123 9123.
What if you can’t afford to make the payments?
If Money Box Loans UK are operating legitimately but you just can’t afford to repay the loan, you can take some steps to protect yourself.
If you are paying them by CPA, standing order or direct debit, you can contact your bank and cancel these or cancel them online. This means that Money Box Loans UK will not be able to collect any payments automatically and you will get back control of your bank account. It is highly likely that your bank will advise you to let Money Box Loans UK know you have done this, but you do not have any legal obligation to do so. They will not be able to collect any money from you, unless you give them explicit permission to do so.
In doing this, you will not get rid of the debt, you will still owe the money so you must deal with that directly. It may seem tempting to hide your head in the sand this is not the best approach. Instead, you should contact Money Box Loans UK and discuss your financial situation with them. They should always treat you fairly, and should be willing to come to an agreement to reschedule your repayments.
These are some of the legal obligations that lenders must adhere to:
- They must give debtors information on where they can get free debt advice.
- They must be willing to hold off debt recovery for a period of time which will give you the chance to develop a repayment plan, which may include using a debt advisor, if applicable.
- They must give you reasonable time to repay the debt, possibly freezing interest and additional charges.
Should you roll the loan over?
Money Box Loans UK will probably suggest that you roll over the loan, but this is because they will make more interest and get more charges, so this is definitely a bad idea for you. The result is that you will be charged more interest and additional charges which will plunge you deeper into debt. If you do decide to roll the loan over, you should be aware that you are not permitted to do this more than twice.
Getting free debt advice
These are some of the organisations who can provide you with free debt advice:
Are loan companies all bad?
There is no doubt that loan companies always get a bad press. But, it could also be argued that they provide a valuable service to many. In some cases, they are offering a credit line to people who would otherwise be unable to get credit from elsewhere, including through a bank or credit card company. The problems arise when these companies place profits ahead of their customers and end up exploiting them and this can cause real harm. Of course, some sharks remain, but the new regulations are making it much safer to use these companies. People still face debt problems though, it is very much still a major problem.
If Money Box Loans UK are failing to follow the regulations, you have the right not to pay them, as they cannot enforce the debt. If you are unable to pay, you should contact one of the organisations we have listed above for free debt advice, and they will give you the help and guidance you require.
If you can’t pay back your loan do check out my other article here.