High-cost loan claims

High-cost short-term instalment loans are paid back over three to twelve months or so, often at very high rates of interest. Lenders like Lending Stream, QuidMarket and Satsuma offered loans like these. The same affordability rules apply: the lender had to check you could keep up the repayments without hardship.

Signs the lending was unaffordable

• You had more than one instalment loan running at the same time
• You took a new loan before the last one was paid off
• The repayments took a large share of your income
• You were also using payday loans or an overdraft heavily
• You missed payments or entered a payment plan

What could you get back?

If a complaint is upheld, the usual outcome is a refund of the interest and charges you paid on the lending that shouldn’t have been given, plus 8% simple interest a year on top, and any negative marks about that lending removed from your credit file. If you still owe money, the refund may be taken off the balance first.

How a claim works

1. Complain to the lender. You, or a firm acting for you, write to the lender explaining why the lending was unaffordable.
2. The lender has 8 weeks to send a final response.
3. If you’re not happy with their final response, you usually have 6 months to take it to the Financial Ombudsman Service. If 8 weeks pass with no final response, you can go to the Ombudsman straight away. It’s free.

You can do all of this yourself: our free complaint letters show you how. Or, if you’d rather not, we can introduce you to a regulated firm that will handle it for you, for a fee.

Is there a time limit?

Usually you need to complain within six years of the lending, or within three years of when you realised (or should have realised) you had reason to complain, whichever is later. Lenders sometimes look at older complaints anyway, and the Ombudsman can decide whether a complaint is in time. If you’re not sure, it’s worth checking.

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Lenders

Useful guides: affordability checks · how much compensation · refund calculator

Questions people ask