Do you feel harassed by Pixies Loans UK about your outstanding loan? Are there loans that you are unable to repay? Are you receiving threats such as being taken to court? Do you consider that the was unaffordable and you shouldn’t have received the money in the first place? If you are facing these or other issues with Pixies Loans UK, then this article 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 Pixies Loans?
Pixies Loans is a broker services that offers short-term loans of up to £2,000 with a repayment period of up to three months. Pixies Loans is the leading online short-term loan provider in the UK and they have helped thousands of people secure a short-term loan. They offer an easy online application and you can choose between payday loans, short-term loans, and three-month loans.
Read what to do if you can’t pay back your debt.
Are loan companies making it too easy to borrow money?
It can be just too easy to borrow money through lenders these days. The internet is packed full with companies who are more than happy to give you a cash advance within a few minutes, or to approve your loan of up to £1,500 in just seconds. Some may promise to advance you money instantly without even undertaking any credit checks. Some will offer loans to people who have a very poor credit history or who have already had trouble with repaying their loans.
Why debt problems exist and what the government is doing to try and help the situation
It is not really surprising that there are many people who are getting into debt problems with these kinds of organisations. The situation today has improved greatly from where it was a few years ago. Prior to the new regulations coming into force, the loan business was getting out of control, and debts were also becoming far too high. At one point, the loan market was worth over £2 billion, and this was a result of irresponsible lending and extremely high interest rates.
Unfair practices were identified by the Financial Conduct Authority, which resulted in massive fines being issued to many of the top players within the lending industry. These companies included Wonga, who were fined £220 million; and others such as The Money Shop who were faced with a collective fine of £15.4 million. QuickQuid were also fined £1.7 million. If money had been lent to people that should not have received the loan because of their “limited criteria”, the customers were issued with a refund. The harsh financial punishment worked. After the three years from the regulation being put into force, the amount of loans being issued fell from 10 million to 1.8 million and the number of lenders also fell 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 Pixies Loans UK is in breach YOU MAY BE DUE A REFUND EVEN IF YOU HAVE PAID OFF THE LOAN.
Loan interest and charges – the government caps
The Financial Conduct Authority have put price caps in place to protect borrowers from facing excessive charges. These include:
- A cost cap of 0.8% per day on the amount of money you have borrowed – this is a combination of both interest and all fees charged.
- A cap on default fees of £15 – after a default, the lender can still charge interest, but it cannot exceed the original rate of 0.8% per day.
- A complete cost cap of 100% – you should not be asked to repay more than 100% of the money borrowed.
These limits are relevant to all credit agreements that come with an interest rate of 100% or more each year and that are planned to be fully or substantially repaid within one year.
Additional regulations were also brought into force in May 2017. According to these, lenders must provide details of their products for borrowers on a price comparison website. This must be authorised by the FCA and borrowers must also be provided with a total summary of the entire cost of borrowing.
If Pixies Loans UK are found to be in breach of the regulations and they are trying to charge you more than they are permitted to, your credit agreement with them will have become unenforceable and they will not be in a position to be able to 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.
There is no doubt that many so-called loan companies are doing business when not authorised to do so. Only authorised businesses are permitted by law to make certain credit agreements. If they are not authorised, then they cannot enforce repayments. You can simply stop paying them and they can do nothing about it.
To check whether Pixies Loans UK is authorised, just enter the name of the company on this Interim Permission Consumer Credit Register search page. You can also search the financial services register here. If they do not have a valid up to date entry on at least one of these registers, simply stop paying them. They have no power to enforce the debt.
Other indicators that Pixies Loans UK might be operating illegally include a lack of information on the company website, information on the website that is out of date or different from the information that appears on the two directories, and non-disclosure of true APR.
How to complain about Pixies Loans UK
If you are under the impression that Pixies Loans UK are failing to adhere to the regulations and they are treating you in an unfair way, you will have the right to make a formal complaint, and if your dispute is not resolved or they fail to deal with it within the required eight weeks, you will be able to escalate your complaint to the Financial Ombudsman.
You should get together all the evidence you have, such as details of any phone calls as well as any letters or emails you have received. You should write to Pixies Loans UK with a heading on your letter stating that you are making a complaint. The more information you can provide, the better. You should also state how you want the matter to be resolved.
If Pixies Loans UK have failed to provide you with a satisfactory conclusion, you will be able to take your complaint to the financial ombudsman. The best way of doing this is to give them a call on 0800 023 4567 or 0300 123 9123
If Pixies Loans UK are found to have treated you unfairly, you are likely to be entitled to receive a refund, even if the loan has already been paid off within the last six years. If you are eligible, you should expect to also receive a refunded on all the interest you have paid on the loan, together with any additional charges. You may also receive 8% interest on all of these payments.
If the loan is determined to have been unaffordable when you were offered it, you will be able to insist that they remove it from your credit record and the outstanding balance will be cancelled.
Your first step is to write to your lender stating your case and a request for compensation.
If you do not get a satisfactory response within 8 weeks, you have the right to follow it up by contacting the Financial Ombudsman by phone on 0800 023 4567 or 0300 123 9123.
Continuous Payment Authority – the new rules
In most cases, loan companies will request that you repay the debt using a Continuous Payment Authority (CPA). The CPA provides the company with the right to debit any sum of money they wish from your bank, whenever they want. They should always inform you before they debit your bank account, but most of them do not carry out this crucial step. The end result is that you are not even aware that the money has left your account until you next look at your bank account.
If you are unable to deal with important payments, including your rent, mortgage or utility bills, and the money is suddenly and unexpectedly taken by Pixies Loans UK before these bills come out, you may end up in serious trouble, which could even put your house at risk.
There are now new regulations related to the CPA, which mean that if the CPA fails to be paid twice, no further requests are permitted to be made to your bank account.
There are also rules relating to the amount of money they can take using a CPA. They are no longer permitted to take partial payments. If you have insufficient funds in your account to cover the full amount of the payment, they will not be permitted to take anything. You can agree that they may take a partial payment, but unless you give them your permission in advance, they will not have the right to do this.
If you have noticed that they have made two requests or they have taken a partial payment without your explicit permission they will be in breach of the regulations and you will have the right to report them. You can report them to the financial ombudsman by calling 0800 023 4567 or 0300 123 9123.
What if you can’t afford to repay the loan?
If Pixies Loans UK are found to have operated legitimately but you just can’t afford to repay the loan, there are some ways you can protect yourself, if you have payments set up.
If you are already paying them by CPA, standing order or direct debit, you can just contact your bank and get these cancelled. Pixies Loans UK will not be able to collect payments automatically and you will be able to take back control of your bank account. Your bank will be likely to advise you to let Pixies Loans UK know that 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.
Cancelling the payments will just delay them, but you will still owe the money and you must deal with that directly with Pixie Loans UK. It may be tempting to ignore them but this won’t make the problem go away. Your first course of action should be to get in touch with Pixies Loans UK and speak to them about the issues you are facing. They have an obligation to treat you fairly, and you should be able to reach an agreement with them to reschedule your repayments.
According to the law, lenders should:
- Provide advice on where you will be able to obtain free independent debt advice
- Hold off debt recovery for a sensible period of time while you arrange a repayment plan, which may involve using a debt advisor
- Offer you reasonable time to repay the money, possibly also freezing interest and additional charges.
Don’t roll your loan over
Pixies Loans UK will probably suggest that you roll over the loan to your next pay day, but doing this is definitely not a good idea. If you do this, you will end up being charged more interest, as well as additional charges, which will leave you in even deeper debt. According to the law, loans should not be rolled over on more than two occasions.
Getting help with your debt problems
There are a number of organisations who will provide you with free independent advice on debt, these include:
Are loan companies all bad?
People have a bad impression of loan companies and many don’t feel that they can be trusted. It could be argued that they can provide a valuable service to many, by providing a credit line to people who may be unable to get access to credit from other places, such as a bank or credit card company. The problems arise when these companies put profits ahead of everything else and try to exploit their customers that they end up doing real harm. While some sharks are still around, the new regulations have made it much safer for borrowers to use these companies. However, debt problems are still a huge problem.
If Pixies Loans UK are found to be in breach of the regulations, you would be entitled not to pay them as the debt will become unenforceable. If you are not able to afford to pay, then you should contact one of the organisations we have listed above, they will offer the help and guidance you require.
If you can’t pay back your loan do check out my other article here.
John (Money Nerd)