Paying back a PayDay loan, you will
normally have one month to pay back your loan, plus any Interest.
This will usually be by means of CPA, continuous payment authority,
which allows the lender to take the money directly from your account,
as you agreed when the loan was first taken out. If there is not
enough money in your account on the day the repayment is due the
lender will keep asking your bank for the monies owed, either all or
part of the total. During this time there will be extra charges for
late payment building up.
If you know that there will not be
enough money to cover the repayment on the day it is due to be paid,
you can instruct your bank or debit/credit card provider to not make
the payment. This can only be done at least one day before the
payment is due.
PayDay loans are they regulated?
Yes they are regulated by the Consumer Credit Act 1974 and the lender may also belong to the CFA, Consumer Finance Association, or some other association with a code of practice they must adhere to.
All loan lenders need a credit licence,
issued by the Office of Fair Trading. If they do not have such a
licence it is against the Law for them to offer any loans. If you are
offered a loan by anyone who is not licensed you can and should
report them to Trading Standards.
The Consumer
Credit Act 2006 requires the Office of Fair Trading to consider
irresponsible lending in its assessment of whether or not a lender is
fit to hold a licence.
Payday
lending in the UK
A
review of the debate and policy options
by
Damon Gibbons, Neha Malhotra, and Richard
Bulmore