Investigating 665 payday loan complaints dealt with by Citizens Advice staff in 2013, experts found that at least 76 per cent could have grounds for an official complaint, and of the 160 complaints made about short-term lenders between April and June this year, 72 per cent found in favour of the customer.
In more than a third of cases, issues regarding continuous payment authorities, where lenders take money from customers' accounts without permission, were involved.
And some 12 per cent of customers were harassed by lenders via phone calls and text messages. One in five were found to be potentially fraudulent. With firms failing to carry out checks on applicants, handing over cash to criminals involved in identity theft, some consumers were chased for payments on a loan they had never taken out.
What's more, where a borrower has difficulty making repayments, the lender should accept a reasonable debt repayment plan. But all too often, payday loans firms pressurise the consumer into roll over a loan, leading to ever worsening debt problems.
Citizens Advice suggests that as many as three in four consumers could have a case for making a complaint to the Financial Ombudsman Service, but believes most people simply don't know where to start.
Gillian Guy, chief executive of Citizens Advice, told the Daily Mail: "The level of debt and hardship caused by some payday loans is absolutely scandalous and people often feel completely powerless to do anything about it.
"But consumers can fight back. If you are struggling to pay back the loan Cirizens Advice can help you sort out a reasonable repayment plan, and if you make a successful complaint to the Financial Ombudsman Service you could find you get a refund for an unauthorised payment or compensation for unfair treatment."
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