Fearing a lender might get in touch with your employer is a common worry for many people that apply for any type of finance, but even more so with the stigma attached to payday loans. No one wants details of their personal finance shared with the people they work with.
But worry no more. Payday lenders do not contact your employer as part of the application process. Normally the only time they might contact your workplace is to speak to you and not your employer, but this is rare.
So why does the application form ask for my employer’s contact information?
As part of the underwriting of a loan, each potential lender must ensure you can afford to repay it. So confirming you receive a regular income is essential. Most of the time, this is taken care of automatically by the systems they have in place. Only in extreme cases will there be a need to contact your employer to confirm that you work there. But, even if that is the case, the lender will not divulge any information about your loan. Discretion is paramount. They will usually ask to speak to you directly.
Any employment information you provide a lender will never be shared with third parties. The FCA has set out strict rules governing this, so you can rest assured those details will be held safe and secure.
In what circumstances might a lender contact an employer?
As proof of employment
If all else fails when trying to verify your employment status, the lender may decide to contact your workplace just to confirm that you do actually work there. As previously mentioned though, the lender will not discuss your loan or application with your employer. It would simply be to establish that you work there.
To confirm details on your application
If, for whatever reason, the lender needs to clarify details on your application with you, they will first attempt all your personal contact points such as mobile, landline and email. If they have no success with those, they may phone your workplace just to speak to you directly.
If you fail to make repayments
When you have not met your repayment commitments on a loan, the lender will first try to contact you via the usual methods of phone, email and even regular mail. If they continually fail to get in touch with you, they may, as a last resort, phone your workplace. They will only want to speak to you directly though, and will not discuss their reason for phoning with anyone else.