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Rainbow Loans

Are Rainbow Loans UK harassing you about an outstanding loan? Are you unable to pay the loans they are contacting you about? Are you being told they may take you to court? Was the loan unaffordable and you should never have received it? If these are some of the problems you are having with Rainbow Loans UK, this article will hopefully help 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.

Rainbow Loans Debt

Is it too easy to borrow money these days?

It could be said that it is too easy to borrow money these days, especially for those who can’t afford to pay it back. The internet is inundated with loan companies who make enticing promises, such as ‘loans in seconds’ and ‘loans for bad credit’, and as such, people are getting access to loans they wouldn’t get from other financial establishments, such as banks. Although these act as a lifeline to many people, loan companies should not be lending to people who don’t have the finances to pay it back.

Write off up to 85% of your debts

This 4 question debt calculator will tell you if you’re eligible.

What is the total amount of your debt?

What causes debt problems and are the government helping?

With people getting access to loans they can’t afford to pay back, it is no wonder that debt problems are now so prominent. The situation has greatly improved, but debt is still a big problem. Thankfully, regulations have been brought in to try and protect borrowers from being offered loans they can’t afford, and being charged exceptionally high interest rates. At one point, the loan market was toppling £2 billion, these days it is much lower, but debt problems are still an issue to be addressed.

The Financial Conduct Authority stepped in to look at the debt situation, and through their investigations, they discovered that many lenders were issuing money which due to “limited criteria”, was not affordable for them. This resulted in huge fines being given to some of the biggest players, including Wonga, The Money Shop and Quickquid. The fines were so large for some lending companies, that they ended up going bust! The tough tactics did work though, and the loans ended up falling from 10 million to 1.8 million. The amount of lenders also dropped 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 Rainbow Loans UK is in breach YOU MAY BE DUE A REFUND EVEN IF YOU HAVE PAID OFF THE LOAN.

Government cap on loan interest and other charges

A price cap was introduced by the Financial Conduct Authority which was designed to help protect borrowers from facing excessive costs and charges. These caps included:

  • 0.8% daily cost cap on the total amount of loan borrowed – including both interest and charges.
  • £15 default fees cap – a default interest can still be charged, but it must not be more than the original rate of 0.8% per day.
  • A complete cost cap of 100% – you should not be asked to pay over100% of the money borrowed.

The limits which have been set are applicable for all credit agreements, with an interest rate of 100% or over this per year, and that will be repaid within a year – either fully or substantially.

There are other regulations which were in force from May 2017. According to these regulations, lenders must give details of their products on a price comparison website which is authorised by the FCA. Borrowers must also be provided with a summary, detailing the total cost of borrowing the money.

If Rainbow Loans UK are found to be breaching these regulations and they are trying to charge you more than they should, your credit agreement may become unenforceable and this means they will not be able to make you repay the loan.

Find your best debt solution (in 1 minute!)

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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.

How do you know if Rainbow Loans UK is authorised?

Believe it or not, there are “loan companies” out there who pretend to be authorised, when they are anything but this. If they are not authorised, it means they have not right to make credit agreements, and they are not in a position to make you pay the loan back. If you stop paying a company who are not authorised, they can’t do anything about it.

It is easy to check the authorisation of Rainbow Loans UK. You can simply just enter their name on this Interim Permission Consumer Credit Register search page. There is another option of searching via the financial services register here. If there is no valid entry, you can stop paying, and they won’t be able to enforce it.

There are other ways to find out if Rainbow Loans UK are legitimate. This includes looking at their website to find out if the information on it is up-to-date and if they are transparent with their APR. If these aspects are missing, it may be the case that this is not a legitimate, authorised company.

What if you wish to complain about Rainbow Loans UK?

You can only make a complaint about Rainbow Loans UK, if they have been in breach of the regulations, or you feel they are treating you unfairly. Loan companies have a responsibility to act in a fair and considerate way towards borrowers. If you feel they have not done this, you may want to consider contacting the Financial Ombudsman.

If you wish to make a complaint, you will need to compile all the evidence you have to support it. This may include any letters, emails or even text messages they have sent. If they have been abusive on a phone call, make sure you have information on the time of the call and if possible, who you spoke to. The more information you have regarding the complaint, the easier it will be to resolve it.

Ifyou fail to reach a reasonable conclusion with Rainbow Loans UK, you should take the complaint further, to the Financial Ombudsman. You can contact them on 0800 023 4567 or 0300 123 9123 to discuss the issues you are having.

In some cases, you may be able to receive a refund on the payments you have made, if it is found to be the case that Rainbow Loans UK have not treated you fairly. In this case, you can also expect to receive interest you have paid, together with additional charges. You may receive 8% interest on the payments you have made.

If it found to be the case that the loan was unaffordable, and you should never have been issued it, you may be able to get it taken off your credit record, and the outstanding balance may even be cancelled.

The first step is to write to your lender and let them know what your case is, and what you expect them to do.

If they fail to provide you with a valid response within 8 weeks, you should follow up your complaint with the Financial Ombudsman by phone on 0800 023 4567 or 0300 123 9123.

Continuous Payment Authority – The Facts

You may have never heard of a Continuous Payment Authority (CPA), but this allows companies to take money from your account, as and when they wish. Obviously this must be money you owe them. They should let you know before doing so, but many don’t. Consequently, this has left borrowers in some drastic situations, with wages going in one day, only to be taken out the next. With a CPA, you may have no idea when to expect the payment to be debited, which is the worrying part of it.

If you are already unable to make important payments, including rent/mortgage etc, and you have Rainbow Loans UK attempting to take money from your account on top of this, it can lead to serious consequences, even, in some cases, putting your home under threat.

New regulations have been brought in regarding the CPA, which mean that if they fail twice, the company cannot make any further requests.

There are also changes with regards to how much they can take. They are not permitted to take partial payments. If the full sum isn’t in your account, they can’t take anything. Of course, you can reach an agreement where they can take partial payments, but only if you do this, can they take less than the full value. If they do this, they are in breach of the regulations, and you can report them.

When they do make more than two requests or they take a partial payment without your explicit permission they are in breach of regulations. You can report them to the financial ombudsman on 0800 023 4567 or 0300 123 9123.

What to do if you simply can’t afford to repay the loan?

If Rainbow Loans UK has operated legitimately but you simply can’t afford to repay the loan, there are some steps you can take to protect yourself.

If you are paying them by CPA, standing order or direct debit, you should contact your bank and cancel these. Rainbow Loans will no longer be able to collect payments automatically and you will retain control of your bank account. Your bank may advise you to inform Rainbow Loans UK that you have done this, but you are under no legal obligation to do so; they will be unable to collect any money from you until you give them explicit permission to do so.

Of course, you will still owe them money so you must deal with that directly; while you might be tempted to do so, don’t hide your head in the sand. Your first approach should be to contact Rainbow Loans UK and talk to them about your problems. They are obliged to treat you fairly, so you should be able to come to an agreement to reschedule your repayments.

By law, lenders must:

  • Indicate where you can obtain free independent debt advice
  • Hold off debt recovery for a reasonable period while you develop a repayment plan possibly using a debt advisor
  • Giving you reasonable time to repay possibly freezing interest and additional charges.

Don’t roll over your loan

Rainbow Loans UK might suggest that you roll over the loan, but doing so is almost certainly a bad idea. You will be charged even more interest and additional charges leaving you in even deeper debt. By law loans can be rolled over no more than twice.

Getting debt help

There are several organisations that provide free independent advice on debt:

Are loan companies all sharks?

There is little doubt that loan companies receive a bad press. It can be argued that they also provide a valuable service by offering a credit line to people who would be unable to obtain credit from a bank or credit card. It is only when these companies place profits ahead of everything else and exploit their customers that they do real harm. While some sharks remain, the new regulations have made it much safer to use these companies. However, many people still get into debt problems.

If Rainbow Loans UK are in breach of the regulations, then you are entitled not to pay them as the debt is unenforceable. If you simply can’t afford to pay, then contact one of the organisations we have listed above, they will provide the help and guidance you require.

References

CONC 2.1 Application

CONC 5.2A Creditworthiness assessment

CONC 13.1 Application

Read More…

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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