Payday and short-term loans are some of the most expensive credit there is. Since January 2015 there’s been a price cap (0.8% a day interest, a £15 cap on default fees, and never more than double what you borrowed in total), but the lender still had to check you could afford each loan.
The more loans you took, and the closer together they were, the more a lender should have looked into your situation. A long run of loans can show you’d become dependent on them, which a lender should have spotted.
Signs the lending was unaffordable
- You took a new loan soon after repaying the last one
- The loans got bigger over time
- You rolled over or extended loans
- You had loans with several payday lenders at once
- You borrowed to repay other borrowing
- You missed payments or paid late
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.
Lenders
Useful guides: affordability checks · how much compensation · refund calculator
Questions people ask
How many loans do I need to have had?
There’s no set number. A single loan can be unaffordable, but complaints are often strongest where there was a long run of loans.
My payday lender has gone bust. Can I still claim?
Several payday lenders, including Wonga, QuickQuid and Sunny, have closed. Where an administrator set a claims deadline that has passed, a new claim usually can’t succeed. We’ll check when we look at your claim.