OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and charges

[Legal Beagles]

The OFT has taken action to address unsatisfactory business practices of payday lender CIM Technologies Ltd, known as Tooth Fairy Finance.

More...

[Amethyst]

Re: OFT acts to improve lending practices

Another bit of good news. Should have been done months ago though, and should have gone further.


Tooth Fairy Finance is a payday lender which typically lends amounts of between £100-£300 to students on a short-term basis via telephone or SMS.


The OFT has imposed requirements on Tooth Fairy Finance which set out that it must not:

• vary the repayment date or amount payable in respect of the loan, unless this is specifically agreed in advance with the debtor
• trade using names other than those permitted by its credit licence
• levy debt collection charges that are disproportionate to the amount owed.

2.2 levy charges that are disproportionate to the main debt and
which do not reflect the actual and necessary cost of recovering
a debt owed to it;

2.3 pressure debtors who have defaulted on an agreement to pay
unreasonably large instalments when they are unable to do so;
0 r

2.4 make any misleading representations as to the action it might
take or might be taking to recover a debt.

The company must also appoint a suitably qualified person to advise on, and administer as necessary, legal and regulatory compliance.
Failure to comply with these requirements could lead to a fine of up to £50,000 per breach or to action by the OFT to revoke the company's credit licence.
The OFT is also working with the Consumer Finance Association (CFA), the trade association for payday lenders, to promote higher standards across the payday loans sector.
Ray Watson, the OFT's Director of Consumer Credit, said:
'Payday lending provides access to credit for consumers who have limited choices. It is imperative that those who offer payday loans do so responsibly and in accordance with the law. Where we are not happy with a business' lending practices we will not hesitate to take action to protect consumers.'
NOTES

1. See the requirements imposed on Tooth Fairy Finance (pdf 52kb).
2. Businesses should not include terms in their contracts with consumers that enable them to vary the date and amount for collection without prior agreement. The OFT considers such terms are likely to be unfair under the Unfair Terms in Consumer Contracts Regulations 1999, as they have the potential to operate to the significant detriment of consumers. For example, where money is unexpectedly taken from consumers' ccounts during a time of financial difficulty, consumers may incur additional fees and charges from their bank or financial provider.
3. Under the Consumer Credit Act 1974 (the Act), businesses that offer goods or services on credit or lend money or are involved in activities relating to credit or hire must be licensed by the OFT. The OFT has a duty to protect the interests of consumers by monitoring the fitness of those holding or applying for licences.
4. A licensee who carries on business under a name not specified in the credit licence commits an offence (section 39(2) of the Act).
5. Where the OFT is dissatisfied with any matter in connection with a business, a proposal to carry on a business or any other conduct by a licensee, associate or former associate, the OFT may impose 'requirements' on the licensee (section 33A of the Act). The OFT may also take action to impose a requirement whilst dealing with an application for a licence to be issued. Requirements may require a business to do or not to do (or to cease doing) anything specified for the purposes connected with addressing the OFT's dissatisfaction, or securing that matters of the same or a similar kind do not arise.
6. There are two ways that OFT can impose requirements. Firstly, the OFT may issue a formal notice to the business informing it of the requirements it is minded to impose. The business may then make representations to an adjudicator who will consider these and make a determination. The business has a right of appeal to an Independent Tribunal. Alternatively, the business may propose requirements and if these are in the same terms as the requirements the OFT is minded to impose, the OFT can impose these requirements without proceeding with the formal notice. Under this procedure, which has been used in this case, the business does not have a right of appeal to the Tribunal.

[Nibbler]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

Good.

I've seen people have no end of problems and grief with this company. Including horrendous emails like this.

[Caspar]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

OMG! That is horrendous. Imagine the poor sod that received that if they took it at face value!

Good news about the OFT mind!:beagle:

[Nibbler]

Re: OFT acts to improve lending practices

Should have been done months ago though, and should have gone further.

Certainly should have done.

Now I've had a chance to digest that, it sends out completely the wrong message.

In that it says to similar companies that they can take the p*** and abuse the rules and regulations to this degree until the OFT finally has no choice to react. And then, there will be no fine or revocation of licence, but just a slap on the wrist and a 'requirement' to behave better. I bet they are laughing.

Same old same old from the OFT.........

[Amethyst]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

Alternatively, the business may propose requirements and if these are in the same terms as the requirements the OFT is minded to impose, the OFT can impose these requirements without proceeding with the formal notice. Under this procedure, which has been used in this case, the business does not have a right of appeal to the Tribunal.

Read more at: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and charges - Legal Beagles Consumer Forum

SO basically toothfairy came up with this all by themselves and avoided the formal notice. I would hope there to be some form of redress impossed for past victims and much stronger protection for current and future victims. I suppose the proof of the pudding is in the eating so we shall see.

[paxon]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

I recently had a complaint i sent to the oft about a payday lender (wageday advance) all they done was sent me back a letter saying they are no longer regualted by the oft so we cant doo anything?
The oft didnt seem to care that all over w.d. adavances website it says that if you have a complaint to go to the oft!

[Amethyst]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

I recently had a complaint i sent to the oft about a payday lender (wageday advance) all they done was sent me back a letter saying they are no longer regualted by the oft so we cant doo anything?
The oft didnt seem to care that all over w.d. adavances website it says that if you have a complaint to go to the oft!

What was your complaint regarding ?


WDA do have a Consumer Credit Licence (assuming it's these people Wage Day Advance UK - Payday loan company offering payday advance loans up to £750 - No credit checks
)

Application / Licence Details




Licence Number:0623347
Licence Status:Current

Current Applicant / Licensee:

Business NameCompany Registration Number Wage Day Advance Limited04179322

Categories:

Consumer credit

Right To Canvass Off Trade Premises:No


Issued Date: 11-Dec-2008
Date Maintenance Payment Due: 10-Dec-2013


Legal Formation:

Body Corporate (incorporated inside UK)

Current Individuals that run the organisation:

NamePosition Dale Walter Chapman

Nature of Business:

Cheque Cashing Services

Current Address(es):

Address TypeAddress Correspondence14, Low Street, Keighley, West Yorkshire, BD21 3PN, England Principal Place Of Business14, Low Street, Keighley, West Yorkshire, BD21 3PN, England Registered OfficeUNIT 7, ACORN BUSINESS PARK, SKIPTON, NORTH YORKSHIRE, BD23 2UE, ENGLAND

Historic Address(es):

Address TypeAddress Registered Office14, Low Street, Keighley, West Yorkshire, BD21 3PN, England

[paxon]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

Well my direct debit was cancelled in error so on my payday they just took there loan from my card details supplied on the application. I was fine with that.

Though they then took £36 worth of "defualt charges" aswell they said it was 3 x £12 i asked why they said they apply for there payments in 3 amounts.

It said nothing about this on there creadit agreement and why should i be charged for stupid company policy, I had one loan so take it in one transaction.

Simply w.d.a would not budge (used the above argument and the section 6.2 of the utccr's) got a full and final of them and sent it to the oft and then i was told "we no longer regualte w.d.a"?????

[EXC]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

[quote=paxon;183051] (used the above argument and the section 6.2 of the utccr's)


Dear me.

So they charged you 3 times for a single default?

Did the 3 payments amount to the repayment of the entire loan?

[paxon]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

Exc well i have had loans in the past with them and they have taken them in 3 payment (what did amount up to the balance of the loan) but only one d'd was ever set up on my account there was never like 3 direct debits set up. and as the d'd was accidently cancelled they took the balance in one transaction from my card.

[Amethyst]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

BCCA - British Cheque & Credit Association representing the interests of businesses that cashed third party cheques is voluntary code of conduct for Payday loans

Don't knwo if WDA are signed up with them, but they do state they are members of the consumer credit association Promoting business and consumer relations in the credit industry United Kingdom

[choward123]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

Hi,

Thanks for everyones advice on here. It really is a great help! I am trying to get in touch with Toothfairy in relation to me not being able to pay any of the interest or loan of this month or for the next couple and was hoping that i could arrange a payment plan with them! (although reading all about them has scared me a bit) I have tried to contact them via email but the email got returned to me and they stated to contact them on their internet page via the "contact us" form. I did this but again it wouldnt go through. I then tried the customer service number on the website to ring them but that doesn't seem to be working and I am just getting a dial tone and no ring.
How do I go about getting in contact with them to arrange payment. At this rate the interest and charges are going to be ridiculously high.
Any help will be much appreciated

[miliitant]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

you realy do need to read this thread, its the same company directors

http://www.legalbeagles.info/forums/...-hoars-baliffs

[GCJ]

Re: OFT imposes conditions on TOOTHFAIRY FINANCE payday lender - unfair terms and cha

Tooth Fairy Finance lot are a joke their IT systems are completely flawed. I believe they are running this so called Company in a deliberate attempt to make the extortionate fees from people allegedly 'defaulting'.
In my case I paid the extension fee to the loan on the day it was due, (showing at that time a total of £544 being owed) their system accepted the payment (£72) and then within 3 days I started receiving
notifications from NDR saying the account was in default. I logged in to find the loan amount had escalated from 400 + Charges of £144 (less the £72 paid 3 days earlier to extend it) up to £904! I immediately contacted them on their email contact address. This email address is also erroneous as it merely bounces with an autoresponder message saying you have to use their contact form. I then filled out the contact form as an existing customer only to be told by their woefully inadequate IT system that I was not recognised as an existing customer. So I then filled out the new customer enquiry form and sent my complaint via that.
This was eventully addressed 3 days later, but none of my points were acknowledged and when I logged in again the alleged debt was still at a vastly escalated level i.e £904 - £72 = £832 as opposed to £544 which is what it should have been. I have taken screen shots (off their website of all my transactions)
and copies of all communications with this 'Shower of a Company'. I will continue to make extension payments of £72 every 14 days until they get their act together. They are threatening Bailiffs and County Court Action which I would welcome. I am genuinely looking forward to receiving and defending any County Court Summons they choose to issue. I am copying all my correspondence with them to over 60 local newpapers and every blog, consumer program and website that mentions them.