Customers should be told about mis-sold loans
Published 21/07/2015 | 02:30
A leading charity has called on the Central Bank to force moneylenders to tell their customers they may have been mis-sold loans.
St Vincent de Paul (SVP) wants the regulators to compel moneylenders to hand out leaflets to their customers to inform them about the case where a Donegal couple had illegally advanced loans written off and received compensation.
Provident, the State's largest moneylender, had withheld part of a new loan it had given to the couple to pay for a past loan. It is illegal for moneylenders to do this. The case was first publicised in the Irish Independent.
The Donegal couple took the case to the Financial Services Ombudsman and won. It came about after Provident was fined after 117 cases of the illegal top-up loans were found in the Letterkenny area of Donegal alone.
There are up to 400,000 customers of moneylenders in this country, and thousands are thought to be in line for similar write-offs and compensation.
Brendan Hennessy of SVP has written to the Central Bank.
"In our view, the Central Bank should require all regulated moneylenders to inform their customers of the Financial Services Ombudsman judgement through a hand-delivered flyer, at the earliest opportunity, or on the next visit of their local agent," he said.
He added: "Crucially, the correspondence should ensure that no impediment is put in the way of the borrower to get recourse to the precedent outlined in the Irish Independent article of both debt write-off and personal compensation.
"The SVP is concerned that little is being done to ensure that those customers who may be in a similar situation are made aware of the judgment and how it might affect them."
A spokesman for the Central Bank said it does not comment on correspondence with stakeholders, or on specific firms.