Taken out an unaffordable
Doorstep Loan?
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Have you ever taken out a doorstep loan from a lender such as Morses Club? Did you run into financial difficulty because the loans became unaffordable? If a lender was irresponsible in lending to you then you might be able to claim a refund on the interest and charges paid.
Doorstep lending – often referred to as home loans or home credit – is where an agent, including those working for Morses Club, comes to your house to offer you a loan. They’re often popular with people who like the convenience of completing the loan process and making repayments from the comfort of their own homes.
The representative from the loan company should request proof of identification, your address as well as details of your income. How much is subsequently given to you normally depends on your income and how much you can afford to pay back each week. However, companies such as Morses Club have been criticised for not conducting suitable affordability checks.
The rate of interest or APR on a doorstep loan is often 200% or more and they’re normally paid back weekly over six to nine months. This APR may seem attractive, compared to typical payday loans, but because doorstep loans are paid back over a longer period of time, the total amount you pay can be similar. As a rough guide, you might expect to pay back £150 to £180 for every £100 you borrow.
Leading charity, Citizens Advice has warned of irresponsible lending whereby people were not being given adequate checks to make sure that they could afford to take out doorstep loans. One example they dealt with included lending to a woman who had very little disposable income because she already had a legally binding debt plan to repay nearly £20,000. Despite this, she was still given three doorstep loans by three separate providers – despite them being aware of her situation.
Citizens Advice also raised concerns about lenders putting pressure on people already struggling with repayments to take out new loans as well as turning up unannounced to encourage further spending. We’re aware of agents making unplanned visits around times people typically have extra expenditure e.g. prior to children returning to school or in the run-up to Christmas etc. encouraging customers to get into further debt.
In some of the worst cases, Citizens Advice reported harsh debt collection methods including intimidating behaviour from doorstep lenders, who earn commission from collecting repayments. This included a case in which a man was visited by a lender on the same day his son died. The lender refused to leave until a family member went to an ATM to withdraw cash. Another case saw a lender harass a blind pensioner for payments while she was in hospital after suffering a stroke – despite already being told not to visit.
People who need cash, and are already facing financial hardship, might find doorstep or home credit loans, their loan of choice. This is because doorstep lenders, such as Morses Club, will often lend to people with a poor credit history, who have been refused credit by mainstream lenders.
An agent will come to your door and provide you with information on how to obtain a loan. If you come to an agreement, all the required paperwork will be completed there and then. The agent, with whom you complete the paperwork on their first visit, will usually be the same person tasked with collecting future repayments and responding to any queries that you may have.
We work on a ‘no win, no fee’ basis so if you’re unsuccessful you won’t have to pay us a penny. However, if you are successful, we deduct a success fee. You don’t have to pay anything upfront.
This list is by no means exhaustive but some other doorstep loan providers include:
– Loans at Home
– Greenwoods Personal Credit
– Shopacheck, now known as Morses Club
Taking out multiple loans is often a sign that someone is struggling with their debts and loan providers are under an obligation not to take advantage of this. According to the Financial Conduct Authority, a doorstep loan is deemed unaffordable if you can’t make the repayments without borrowing more money, using your overdraft, or failing to pay your priority bills resulting in you getting into further debt.
Yes. Even if you always paid your loan repayments on time, it would still be classed as unaffordable if you had to borrow more money to do so. This might be because you had to keep refinancing or taking out top-up loans to keep up with the repayments. In these cases, the lender should have realised that your life was being made more difficult when you kept increasing your borrowing. A responsible lender should have suggested you pay one loan over a longer period, with no additional interest, but all too often people are just offered bigger or more loans.
If lenders, such as Morses Club, have let you take out lots of loans without doing proper affordability checks then you may be entitled to have the loan stopped and claim a refund for:
– The interest you paid on the loan
– Any fees and charges
– The interest paid on the fees and charges
You can also ask for any negative information contained on your credit records to be removed.
Sometimes, despite your best efforts, you might struggle with your repayments and fall into arrears. According to the Financial Conduct Authority, where there is an ongoing claim against a lender, then the lender must not keep asking for payment without providing clear justification or evidence as to why the claim is invalid. However, where possible you must always try to make your contractual payments as missed payments could affect your credit rating.
It’s really simple, just call us today for free initial, no-obligation advice. Alternatively, apply online and a member of our dedicated financial mis-selling team will be in touch soon. CEL Solicitors specialise in mis-sold doorstep loan claims and our friendly advisors will guide you every step of the way.
