Taking out credit is a serious decision
The decision to take out credit, however small a sum, is one not to be made lightly and we encourage consumers to think carefully before deciding to borrow. You should investigate whether other alternatives are available, or indeed if you need to borrow at all. Nevertheless, a small sum, short term loan can sometimes be an option to consider if you have an immediate cash flow need, and do not want to take on longer term debt or increased loan amounts.
At Uncle Buck we believe consumers should be able to choose from whom they borrow and how much they borrow. Of course, certain lenders may not be willing to lend the sums requested, whether larger or small. Consumers can research information and products online quite easily, responsible lenders will provide full information on their websites making it relatively straightforward to compare costs of loans.
Used properly, it is difficult to see how using payday loans can trap consumers in “cycles of debt”, as the loan is only for the short term.
Payday loans are suitable for small sum, short term cash flow needs. They are not suitable as a means of longer term borrowing and would be expensive if used in this way. Payday loans are not suitable for consumers in financial difficulties and a loan from Uncle Buck will not solve any structural, or longer term, financial issues. Indeed, if in this position, it could make things worse. Uncle Buck carries out checking on details provided by applicants, however we can only ever gather historic evidence from applicants such as past payslips or bank statements and so we need applicants to be truthful and realistic when making applications to us.
We want our customers to be able to repay what they agreed to on the date they agreed to repay us, without undue financial stress. We would rather consumers who do not intend to honour their credit agreement do not apply to Uncle Buck. We take customer service very seriously and examine every complaint we receive in full and with due care, providing a considered response in the timescales laid down. Our call centres are UK based and staffed by real people during our opening hours, so consumers can ask questions in their own words and be guided through options or explanations by our agents. We also have a comprehensive FAQs site on our website if it’s out of hours.
Uncle Buck wants customers to be very happy with our service – although we would like our customers to come back to us, in one way we hope that the circumstances that led to their application don’t recur too often.
You know where you are with Uncle Buck.
Rollovers – responsible or reviled?
The debate around rollovers continues. Uncle Buck believes that the number of rollovers should be limited as customers cannot be allowed to continually pay down the interest on their loan without also clearing some of the capital. Responsible lenders encourage capital pay down to minimise overall costs for the customer.
However, it is a fact of life that no matter how good customers are at planning and budgeting for their expected payday loan repayment, finding a lump sum if there are other, unexpected expenses arising can be difficult.
Uncle Buck supports a view that customers should be able to choose to rollover on a very limited number of occasions if this would help prevent them from falling into default, but this does not automatically mean they are in structural financial difficulty. Uncle Buck supports the Payday Lending Customer Charter and will only consider a rollover if the customer requests us to do so. Furthermore, we will also require any interest and fees to be paid before agreeing to rollover, which is subject to a further affordability assessment. Customers are given information about the cost of their rollover and how much they will need to repay on the next due date. This enables customers to make an informed decision about whether a rollover is a good option for them at that point in time. Uncle Buck also encourages customers to repay some capital at the time of the agreed rollover in order to help reduce the overall cost of the loan.
The OFT review appeared to find that a number of payday loan lenders agreed to roll over loans even after the borrower had already missed a repayment. This is not, in our view, what rollovers are about. The recent House of Commons BIS Committee took evidence from three payday loan lenders and two trade associations, and found mixed responses. Uncle Buck believes that, rather like any rate capping exercise, consumers may tend to any rollover limit simply because this is convenient, and may “self manage” their loan repayments into “chunks”, by using rollovers as a means of reducing the amount of each repayment required and so increasing disposable income for other consumption. Although this may increase the overall cost of the loan, consumer behaviour may suggest that the convenience factor of adopting this process allows consumers some flexibility. Not all consumers rollover because they are in financial difficulties, and Uncle Buck believes that, for some consumers, one rollover would be too many if affordability checks indicated that consumer was likely to be in financial difficulties.
The same Committee also took evidence from a number of consumer groups who appeared to be tending to a limit of one, with some representatives indicating that they felt two was a good starting point.
Uncle Buck believes that customers do require flexibility particularly if a short series of unrelated unexpected expenses occurs, which can happen to any individual.
Research published by the Competition Commission concerning payday loan customers
Alongside its Annotated Issues Statement and first tranche of working papers, the Competition Commission (CC) published research it had commissioned, and which was carried out by TNS BMRB, into the behaviour and experiences of payday loan customers.
This survey is thought to be the most robust analysis to date as the sample of customers was drawn from actual customer data supplied [at the CC’s request] by 11 major lenders. The design and content of the research was developed around the key objectives of the CC’s investigation, with an overarching aim of “understanding the market” from a consumer perspective, decision processes and factors influencing them.
The results go some way to moderating some of the more extreme views about the payday lending market and payday products.
Uncle Buck welcomes the research and believes it provides evidence that payday loans are used by a wide cross section of the population. The survey found that, for example, over 1 in 3 customers was educated to degree level, about 7 in 10 work full time, 6 in 10 are male and 1 in 5 aged 18-24. 28% of customers had a household income of over £36K per year.
The average loan size was £239 and 49% of customers had loans of under £200. The main benefits of online borrowing were seen as speed and convenience. Most customers have never shopped around, giving reasons such as lack of time, having a previous relationship with a lender and being happy with the first lender found. Customers switch lenders through necessity and choice, most who remained with the same lender said this was due to being happy with the service they provided.
Although 56% of customers said they had been overdrawn in the last 12 months, this finding also suggests a significant minority (up to 44%) had not been overdrawn in the last 12 months. 74% of customers said they had used some form of non payday credit in the last 12 months (49% excluding overdrafts), however, this suggests that 1 in 4 payday customers had not used any form of non payday credit in the last 12 months.
There were some positive messages about repayment and choice.
- 94% of customers said they understand very or fairly well what they needed to repay on their loan, with a significant majority (78%) saying very well
- Nearly 8 in 10 of those whose repayment dates had passed said they repaid in full by the repayment date
- Over half felt that getting the money to repay was as easy or difficult as they had expected, but almost 1 in 4 felt it was easier than they had expected
- Although there is evidence that customers were sometimes unaware of default or late fees, the survey showed this seems to be largely due to inactivity on the part of customers to look these up, driven in part by a belief that they would not be incurring those charges. Uncle Buck notes here that any late payment fees or other charges for breaching the agreement are clearly laid out in the pre-contractual, and the contractual documentation, which consumers are guided to “read and consider” before deciding whether a payday loan from Uncle Buck is right for them at this time
Uncle Buck is also pleased with the survey results in terms of customer satisfaction. The research found that customers value a good experience, this can include being valued as a customer, having a straightforward application process and a log-in area where customers can manage their account. Uncle Buck strives to provide excellent customer service from its wholly UK based team and it is good to know that payday customers appreciate this.
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WarningLate payment can cause you serious money problems. For help, go to moneyadviceservice.org.uk
Payday loans are not suitable for, and would be
expensive as, a means of longer term borrowing
and are not appropriate if you are in financial
difficulty. Please click here to review our responsible
Although we do our best to process your application swiftly, payday loans are only processed during office hours and are subject to availability and your suitability.
The decision that you receive as to whether you are eligible or not is in principle regarding the information that we have on you. The loan is NOT guaranteed until we get all the information required and do extra checks if necessary. We will update you via email if there are any problems with your payday loan application.
Funding is available within one hour but only if you select this option when making the application and providing you make the request during office hours. There is a £15 for one hour funding and if you don't select this option, funds should be in your account within 3 days. Every customer is different though and this usually comes down to who you do your banking with as some are quicker at processing payments than others.
Let us take a look at the APR we charge as a company in a way that you will understand. If you decide to borrow £200 for a 29 days, you will be repaying £269.90. These figures will obviously vary based on how much money you want and how long until you can pay it back. Interest is charged at a rate of 439.89% and APR is 4248.9%. These rates are fixed and are non negotiable under any circumstances. You should consider very carefully about if you can afford to pay the loan back before you make the application.
Although payday loans are not suitable for everyone, they have a purpose and they always meet this purpose as long as the agreement is met on our end and yours. We hold no liability if you are in financial difficulty, payday loans should be used for the short term only and not as a way to live.
Uncle Buck is a trading name of Uncle Buck Payday Loans LLP Company Number OC356091. Registered Office Building 707 Biggin Hill Airport, Westerham, Kent TN16 3BN. Uncle Buck is authorised and regulated by the Financial Conduct Authority (Interim Permission Number 640978). You can confirm our registration on the Financial Conduct Authority’s website or by contacting the Financial Conduct Authority on 0800 111 6768.