Helping people win compensation from high cost payday lenders


Debt Hacker founder Alan Campbell was interviewed by Claer Barrett, personal finance editor at The Financial Times, as part of their Money Show.

Below is a transcript of the interview, so you can read how Debt Hacker is helping people win compensation from high cost lenders using or free payday loans complaints tool.

Listen to the original podcast here, with this section starting from 11 minutes in, or watch the video for the whole interview.

Debt Hacker on the Financial Times Money Show

Claer Barrett (CB): The payday lenders hit the headlines earlier this year with the collapse of Wonga, perhaps the best known in the UK.

As the FT reported at the time, a major factor in its demise was the soaring number of consumer complaints about high interest loans it had granted and the size of the compensation bill it then had to pay.

A new website called Debt Hacker is set to launch with the aim of encouraging more payday customers to apply for compensation. The man behind it, financial campaigner Alan Campbell, says he would be quite happy if it ended up putting more high-cost lenders out of business.

He joins me now in the studio, welcome Alan.

So customers of payday lenders can use this Debt Hacker complaints tool that you've been creating to get compensation, but why might they be entitled to money in the first place?

Alan Campbell (AC): They're entitled to recompense where they've been advanced unaffordable lending.

There seems to be a conspiracy of silence at the moment about people's rates. People have the right to not be burdened with unaffordable lending and the obligation is on the lender to make sure that they do the necessary checks, in terms of checking income, checking bank statements, checking other commitments that people have got so they’re not burdened with unaffordable lending.

Where there is a problem with unaffordable lending, they can make a claim - first to the lender and then secondly to the Financial Ombudsman Service, who will adjudicate that claim.

CB: In terms of the money that they'll get back, they may not necessarily receive the money that they've been advanced in the payday loan.

But they could receive compensation in the form of the interest that they've had to pay on a loan, if they can prove that they can't afford it and any fees that may have been charged, which could actually be more than loan itself, depending on how long ago they took it out.

AC: That's absolutely correct. They're entitled by law to get back all of the interest and all the charges and that's on historic debt.

So this is effectively financial asbestosis on the balance sheet of all those lenders, because this can go back for years and years and years.

For current debts they’re entitled to avoid the loan, if there's a current a debt, but they only then have to repay the principal when it becomes a affordable to do so, which maybe sometime in the future.

CB: How does Debt Hacker enable people to access this compensation?

AC: Well it's not compensation. It's to easily make a complaint to a lender.

We should make that distinction Debt Hacker is a simple easy-to-use online tool whereby the person comes along puts on the email address, puts in the details, and then we organize and dirie the complaint on their behalf to the lender and then come back to them with a dates and times in which the lender should comply with that complaint.

Then if the complaint is not settled to the borrower's a satisfaction we then organize on behalf of the way that our complaint and Financial Ombudsman Service

CB: And you're providing this service completely for free?

AC: It's completely free, 100%, all of the money goes back to the borrower.

CB: I have to ask, why are you doing it? Because you fund this service personally through your own money.

AC: I'm funding through my own money. I have made money in the past and I want to make a difference.

I see a complete conspiracy of silence where well 8.3 million people are burdened with an over-indebtedness are not aware that they can simply unburden themselves by putting down the struggle that many of them go through on a month-by-month basis to repay debt which they should never have been advanced.

CB: We've reported before that the complaints about payday lenders are soaring as awareness of the potential compensation grows.

Under the current ombudsman rules, after the first 25 complaints, payday lenders are charged an administration fee of £550 to process every complaint, even if it's found that they did nothing wrong. Do you think that's really fair?

AC: I think what's unfair is that people first of all at the moment don't understand what their rights are and those are Parliament given rights.

The first thing I should actually point out we are only starting with payday lenders. Remember there's 200 billion of consumer finance out there you know that was 8.3 million people are over indebted.

We will get to other lenders in due course, because the systemic industry failure of the lenders not taking their responsibility seriously, being ignored by the FCA, something has to be done about that and that's what we intend to do.

CB: Wonga has gone out of business. But surely if more payday lenders or other high-cost lenders exit the UK market for whatever reason, this will remove an important albeit expensive means of people to get credit. Where will those people turn instead?

AC: High-cost credit is a form of credit which people access. The problem is if they only access that once it's not unaffordable. If they're in a cycle of debt where they're increasing the level of debt through high-cost lending, then that becomes unaffordable.

All we are doing is to make the environment for unaffordable lenders more difficult as the borrowers understand their rights. That's what we're seeking to do.

Enfranchise the borrowers with knowledge, so that if they do get into an unaffordable landing pattern, they'll recognise it and then they'll make a complaint.

CB: Do you also think that it could prompts more consumers to seek advice for their problem debts at an earlier stage in the process?

AC: Our campaign isn't for people who are drowning in debt because there are debt agencies there that are capable of giving them support.

Our campaign is to awaken the people who are struggling. The industry actually refers to them as willing strugglers.

The industry knows that if you are over indebted and that person takes the responsibility of repaying that debt very seriously, they'll struggle month in, month out to repay that - even, if that means kids going without meals families losing houses or mental or physical illness. The industry is preying on that.

CB: Thank you very much there. Alan Campbell founder of the group launching the Debt Hacker tool.

Debt Hacker