If a complaint is upheld, the aim is to put you back where you’d have been if the unaffordable lending hadn’t happened. Usually that means:
- A refund of the interest, fees and charges you paid on the lending that shouldn’t have been given
- 8% simple interest a year on each payment, from when you paid it to when you’re refunded
- Any negative information about that lending removed from your credit file
You don’t get back the money you borrowed: you had the use of that. The refund is the cost of borrowing it.
An example
Sam took six payday loans over a year. The lender’s checks were fine for the first two, but by the third Sam was clearly relying on them. The Ombudsman upholds the complaint from loan three.
| Amount | |
|---|---|
| Interest and charges paid on loans 3 to 6 | £1,240 |
| 8% simple interest (about 4 years on average) | £397 |
| Refund before tax | £1,637 |
Tax is normally taken off the 8% interest part. See is compensation taxable?
If you still owe money
If you still owe the lender, the refund is usually used to reduce or clear the balance first, and you’re paid anything left over. See can I claim if I still owe money?
Get a rough figure
Try our refund calculator.