Why the launch of yet another anti-consumer credit campaign could have dire consequences for the customer
Commentary | 26/10/18
Yesterday, I was fortunate to be able to represent the views of our members and industry on the BBC Radio 4 You & Yours programme which can be heard here. The 8 minute segment referred to the launch of the Debt Hacker campaign and gave its founder, Alan Campbell the opportunity to lay out his stall regarding Debt Hacker, and his desire to bring an end to high cost credit.
While the campaign intentions are to be applauded, there is a danger that the direct submission of mass complaints to FOS, regardless of whether they are genuine or not, will have an adverse effect on the sector as lenders will opt to leave the market leaving the customer with reduced availability to consumer credit.
The demise of Wonga has prompted the campaigners to focus on other lenders by taking the view that “if just 100,000 people complain to the FOS about how they are treated, it would cost the payday lenders £55m alone, win or lose” and the Debt Hacker website tool allows customers to complain directly and therefore without the assistance of a CMC and their associated fees. This is a great tool for the submission of genuine complaints but the cost of deluge of false complaints will still render many small lenders inoperable and effectively close down the sector by default.
Whilst government and the FCA remain prostrate because of Brexit, consumer activists in consumer credit are having relatively free rein to concoct their storylines and spin, and the customers requiring access to responsible credit could become the unintended casualty.