The Consumer Finance Association, which represents some of the best known payday lenders but does not represent brokers, said:
“Brokers do not lend any money – they are simply the middlemen. There is no need to pay a fee to arrange a loan. You can go direct to reputable lenders who have new rules that ensure they will be clear and up front about costs and they cannot make more than two attempts to collect your loan payments from your account. Many brokers have no such rules and will keep dipping into your account to take arrangement fees.”
The CFA continued by offering some advice to potential borrowers:
“The advice to anyone arranging a loan, either online or on the high street, is to look for a name you know and take the time to check the business has a valid licence to operate and is a member of a trade association*. Most importantly, if you aren’t certain about the business or their service, never disclose your personal and bank details.”
About the Consumer Finance Association
The CFA is the principal trade association representing the interests of responsible short-term lending businesses operating in the UK. Members include The Money Shop, SpeedyCash, eCashWindow, MEM, Quick Quid, Cash Converters, Express Finance, Payday UK, Peachy and Sunny.
The CFA paved the way for the FCA’s statutory regulation by driving industry improvements and best practice through the implementation of an industry-wide Good Practice Customer Charter and the CFA’s own Code of Practice in 2012.
*CFA members are listed here