Monday 26 September 2016

How consumers can get an illegal loan written off

Published 17/06/2015 | 02:30

It is illegal to be given a new moneylender loan before an existing one is paid off
It is illegal to be given a new moneylender loan before an existing one is paid off

Thousands of people who got moneylender loans topped up may be entitled to get it written off and receive compensation.

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It is illegal to be given a new moneylender loan before an existing one is paid off.

A ruling by the financial services ombudsman has set a precedent for compensation, experts said. This only applies to moneylending borrowings.

Anyone affected should first challenge the moneylender about their loan. If they are unsuccessful, they can take a case to the ombudsman, a free service.

To take an ombudsman case you need a letter from the moneylender refusing to offer you redress.

However, many people will face a dilemma if they make a claim to their moneylender.

A loan from the moneylender may be their only source of credit, even if interest rates are as high as 188pc.

Moneylenders may refuse to deal with people who are seeking a loan write off and refunds from them, prompting some soul searching for affected consumers.

The best bet is make a claim, and open a credit union account.

Irish Independent

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