The Office of Fair Trading has criticised a loan broker after receiving a series of complaints from unhappy customers. The complaints were made about Yes Loans, and the complaints related to the fact that many consumers were given the impression that YES was a lender and not a broker.
As a result of the complaints the company has been told that it must ensure that it is made clear that it is a loan broker that passes details of applicants onto other lenders, and that it is not an actual lender itself.
Loans through YES are designed for those with damaged credit, and because of this the loans that are offered through the broker are typically high interest loans.
Applicants were not happy when they were told that they would have to pay a referral fee for being introduced to a lender, as many were under the impression that YES was the lender and would be the company that provided them with the loan. The cost of the referral fee charges varied based on the size of the loan being taken.
The company has also been slated for failing to return brokerage fees as well as failing to be clear about being a broker and not a lender.
If a customer pulls out of the applications process or the company fails to find a loan for the applicant it must, by law, refund the referral fee, but in many cases it has failed to do this according to reports. It has now been told by the OFT that it must ensure that refunds are provided within thirty days to eligible consumers.
An official from the OFT said: ‘Many businesses charge an up-front fee for brokering loans for consumers, and customers should be aware that if they use a broker but do not accept the credit offered, no matter what the reason, they are entitled to a refund less £5. The OFT will continue to take action against companies who fail to do so.’
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