Bad credit payday loans: Concerns over charging order use

Bad credit payday loan customers have been told that the use of charging orders to secure relatively small debts is "concerning".

Chris Jenkins, creative director at Dallas Matthews, said that it is important that lenders assess each case on its "own merits", based on the customer's personal situation.

Mr Jenkins said: "I believe that some lenders are simply slapping charging orders on properties without assessing individual circumstances and it is this practice that the [Office of Fair Trading (OFT)] is keen to stamp out."

He advised borrowers to talk to their lenders if they are struggling to repay debts, as if their case were to go to court their efforts would be viewed favourably by a judge.

The OFT reported earlier this week that it had imposed requirements on some lenders as a result of concerns about the way some consumer debts were being recovered, such as using charging orders.

A charging order is a court order that turns unsecured debts into secured debts charged against their property.