Mobile phones are set to be deluged by spam texts from pay-day loans companies.
The watchdog that deals with nuisance calls and spam text messages is launching a crackdown on payday loan firms who send unsolicited messages to drum up business. But that’s led to fears that dodgy companies will send millions of messages before the authorities can catch up with them.
With some payday loans outfits charging interest that can run to more than 2000%, consumer bodies fear vulnerable people could be ripped off if they reply to the texts. The Information Commissioner’s Office (ICO) said last week that they are about to begin proceedings against payday loans companies.
It was claimed the last time the ICO announced their intention to investigate a company there was a spike in nuisance calls from that firm. They only dried up once it was hit with a fine of nearly half a million pounds. The revelation came in evidence to the All Party Parliamentary Group on Nuisance Calls set up and chaired by Edinburgh MP Mike Crockart.
Simon Entwistle, Director of Operations at the ICO told the APPG: “We will take action shortly on people trying to sell payday loans via text.”
The ICO claim they are unaware of a spike in activity when they start proceedings but Entwistle admitted: “We would like to be able to do the whole thing more quickly.”
Consumer groups such as Citizens Advice and Which? say complaints about payday lenders are on the up.
Chief executive of Citizens Advice Scotland Margaret Lynch said: “We see lots of evidence of nuisance phone calls and texts both in terms of lenders harassing existing customers, and also spam marketing.”
She added that once someone has taken up a loan in response to a text they face many more communications if they fail to repay on time.
Customers have complained of being contacted 20 times a day. Mrs Lynch said: “It has become one of the biggest types of case that we deal with.”
Earlier this year a telecoms company was rapped by watchdogs and banned from sending any more adverts after it transmitted texts encouraging people to borrow money for a “night on the town” at
an interest rate of more than 2000%.
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