Before lending you money, a lender has to check properly that you can afford to repay it without getting into difficulty: looking at your income, your spending and your other debts, and doing more checks the bigger or more expensive the borrowing. These rules are in the FCA’s Consumer Credit sourcebook (CONC), and similar guidance applied before 2014.
If a lender didn’t do those checks properly, or ignored what they showed, the lending may have been unaffordable, and you can complain.
What we check
- Payday and short-term loans
- High-cost instalment loans
- Guarantor loans (for borrowers and guarantors)
- Doorstep and home credit
- Catalogue and store credit
- Credit cards
- Bank overdrafts
Signs the lending was unaffordable
- You had several loans or cards at the same time
- You took out new loans to repay old ones, or kept rolling over and topping up
- You missed payments, paid late, or got default charges
- Your credit limit kept going up while you were struggling
- You were struggling to pay bills, rent or council tax at the time
- The repayments took a large share of your income
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
- Complain to the lender. You, or a firm acting for you, write to the lender explaining why the lending was unaffordable.
- The lender has 8 weeks to send a final response.
- 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.
Been in an IVA, bankruptcy or a debt relief order? You may still be able to complain, but any refund might go to your creditors or insolvency practitioner instead of you. Tell us when you do your check.
Lenders
Useful guides: affordability checks · how much compensation · refund calculator
Questions people ask
Will checking affect my credit score?
No. Our check doesn’t involve a credit search. A firm acting for you may ask your permission to look at your credit file, which is a “soft” search that lenders can’t see.
Can I claim if I paid the loans back?
Yes. Many successful complaints are about loans that were repaid in full. What matters is whether the lender should have lent to you at the time.
Can I claim if the lender has closed?
Sometimes. If a lender went into administration or a scheme of arrangement, there was usually a deadline to claim. Where it has passed, a new claim usually can’t succeed. We’ll tell you if that applies.
Do I have to use a claims company?
No. You can complain to the lender yourself and then to the Financial Ombudsman Service for free. Our free complaint letters show you how.