Woman allowed to take out EIGHT payday loans at same time to run up £3,000 debt
The Daily Mail, 06 Mar 2014
A woman with a history of debt problems has made a mockery of payday lenders' affordability checks by taking out eight payday loans at once worth almost nine times her monthly disposable income.
In a stunt organised by guarantor lender Amigo Loans, its 23-year-old employee Lisa Kelly tested the nation's biggest payday lenders on their claims to have robust procedures in place to assess the affordability of their exorbitant short-term loans.
Lisa, who lives near Bournemouth, Hampshire, applied for credit from more than 40 payday firms over a three-day period in February, and was given loans of varying length totalling £2,340 from eight different lenders, meaning she would have had to repay £2,983.
Half of the lenders who approved loans - including market-leaders Wonga, QuickQuid, Money Shop and My Jar - failed to ask about Lisa's monthly expenditure, and had they done so, they would have realised she only has around £355 disposable income each month.
The two biggest lenders, Wonga and QuickQuid, approved loans much higher than her disposable income, of £550 and £800 respectively.
Peachy, Mr Lender, Uncle Buck and Cash Access were among the lenders who rejected Lisa's applications.
Credit reference agency Experian says that currently, lenders update information about the credit they grant on a monthly basis, so it can take up to a month before a payday loan appears on a person's credit record.
In spite of this, My Jar was the only one of the eight lenders who asked whether she had any payday loans outstanding - and STILL approved a £100 loan even though she told them that at the time she had FIVE outstanding payday loans.
She said: 'I was really shocked at how easy the whole thing was, particularly with the larger companies. The speed at which the money ended up in my account was incredible.
'I volunteered to do this research because I had experience of using payday loans and was shocked by their practices.
'I only had to give basic information, the biggest lenders didn't even ask me about my monthly outgoings.
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