Irresponsible Lending and Pay-day loan refunds

Don't quit at the first hurdle!

Reclaim unaffordable loans for free

Did you get a loan that you couldn't afford to repay as the lender didn't check your finances properly or kept trying to sell you it again and again? If so, you may be able to reclaim the interest and charges back from the lender which could amount to £1000's!

Unaffordable and Irresponsible loans

"Payday loans" are notoriously for being unaffordable but you can make a claim for any loan that was made without following the legal steps to make sure it was affordable. Many Corporations engaged in irresponsible lending and are now having to pay back their ill gotten gains.

What is a payday loan and why are they flawed?

Payday loans are designed to be short-term loans of £100 to £1,000 that – as their name suggests – tide you over to the next payday, at which point you have to pay it back, plus the interest accrued.

They're often far too easy to get and many borrowers have been stung by tricks used by payday loan firms, as well as their lending decisions, and have ended up struggling to pay it off, running up hideous amounts of interest.

Following the demise of the UK's largest payday loan firm, Wonga – partly down to the increase in people reclaiming for mis-sold loans – MSE founder Martin Lewis said:

The payday loan industry was built on the back of marketing, not need. They sold people the concept of a need to create a demand, then pushed products. Payday loans are for most a flawed concept. How many in dire need this payday would see such an improvement within a month that they not only not need to borrow again, but could repay last month's loan plus the huge interest?

It made it too easy – some even told anecdotes of drunk people, coming home, watching gambling on TV, seeing Wonga's ads then pushing the button for instant cash at 5,000% APR to bet with. And as many couldn't afford to repay, payday lenders made people sign up to immoral agreements that meant cash could be taken directly from their bank accounts without request.

How do I check if I was mis-sold?

Before lending to you, payday loan firms – as part of the Good Practice Customer Charter and the rules imposed by the Financial Conduct Authority (FCA) – should check your finances to make sure you can afford it and also give you all the key information. If a payday lender hasn't followed these rules then you have grounds for a complaint.

Quite simply, the main reason you may have been mis-sold a payday loan is because you should never have been lent the money in the first place – as you could never have afforded to pay it back.

For example, if you earn £400 a month and you get given a payday loan for more than this, it should be clear to the payday lender that you wouldn't easily be able to pay back the loan – in fact you would probably get into a situation where you needed to borrow more money to try to pay back the original loan.

The Financial Ombudsman Service (FOS) said it received 17,256 complaints about payday loan lenders in 2017 and upheld 61% of complaints received – and as payouts can be worth £1,000s, it's worth checking if you were mis-sold.

The mis-selling checklist

You can claim a refund from existing loans and loans you've already paid off, as long as you raise the case within six years of taking out the loan (if it's longer than six years, contact the FOS as in some circumstances, you may still be able to claim). Here are the main mis-selling categories. If you fit one or more of these, you're likely to have a case:

If the lender did not make clear to you how much it would cost you in total to repay the loan. You should have been given an example of the price for each £100 borrowed, including fees and charges.
You weren't given full or accurate information about how and when to pay back your loan.
The lender did not sufficiently check your finances or personal situation to make sure you'd be in a position to pay back the loan. Here you can take such factors into account as your age, mental health, employment status, income, expenditure, proof of identity or financial history.
The lender didn't tell you that a payday loan should not be used for long-term borrowing or if you are in financial difficulty.
You weren't told by the lender what to do if you have a complaint.
The lender didn't make clear to you how continuous payment authority (CPA) works – where you agree to pay off the loan by making a series of deductions from your credit or debit card – and your right to cancel it.
The CPA didn't tell you in advance that it was going to take money from your account.
The lender didn't include a risk warning about late repayment in its online advert, or in an advert that was sent to you by email or text message.

If you've had problems repaying the loan, you can complain if your payday loan lender:

Didn't deal with you "sympathetically and positively".
Didn't offer to freeze interest and charges if you were unable to make payments under a reasonable repayment plan.
Didn't tell you about free and independent debt-counselling organisations.
Pressurised you to extend the loan.
Didn't tell you about the risks of extending the loan.
Didn't make clear exactly how much it would cost to extend the loan.
Didn't check your personal finances and general situation to see if you were able to pay back an extended loan.

Can I still get money back if my payday lender has gone bust?

You'll need to make a claim with the firm's administrator, but the short answer is that it all depends on how much money is leftover and how many creditors this has to be shared between.

Unfortunately, customers of payday lenders are at the back of the queue of people owed, being counted as 'unsecured creditors'. This means they're unlikely to see all the money they're due and could be waiting months.

Even those people who get their claims in just before a company goes bust may not get any more than those who filed theirs afterwards – it all depends on the administrator and the circumstances.

Payday lenders aren't covered by the Financial Services Compensation Scheme, the consumers' safety net for when most finance firms fail. So when they go bust, the size of the payouts is down to how much money the administrators can squeeze out of the business and how many creditors are lining up.

In terms of speed, you won't necessarily be better off using a claims management company. Wonga's administrator Grant Thornton says it won't be dealing with such claimants any faster than others. And as we always say, using a claims firm will cost you in fees which can run into £100s.

If your payday lender goes bust and you're paying back a loan, you're likely to have to continue paying until the administrator tells you otherwise. In some cases, what you're owed for being mis-sold could be wiped from the ongoing loan. You could be due the interest and charges and interest on all of that, and often this caboodle can work out bigger than the original loan itself.

So get in fast if you've been mis-sold, in case your payday lender goes bust – or you could lose out big time.

There's a special compensation route for Wonga customers. Sadly, you won't get much back

Wonga customers must apply for compensation via a website set up by Grant Thornton. But sadly you'll only get a few pennies in the pound of any money you're owed, eg, if you were owed £100, you'll be lucky to get more than a fiver back.

You only need to put in your identification details and, provided these match Wonga's records, you'll get a receipt that you've lodged a claim.

You don't actually have to explain how you were mis-sold. Instead, Grant Thornton will assess if you are owed money by examining your Wonga loan history. Grant Thornton insists it is following guidelines set out by the Financial Ombudsman Service when making its assessment.

If unsuccessful, you can escalate your complaint within Grant Thornton's complaints department but you can't complain to the ombudsman, as payday loan firms that are in administration fall outside its remit.

Do note that payouts aren't likely until June 2019 at the earliest.

I think I was mis-sold – how much can I get?

It's all about being put back to where you should have been if you'd been treated fairly and responsibly in the first place and we've seen reclaims ranging from £100s to £1000s so far.

You should get all of the interest, fees and charges back, which will usually dwarf the original loan. You're also due 8% interest on the interest, fees and charges each year, dating back to when you first started paying them. For example, if your refund was £1,000 from one loan exactly four years ago, you'd also have 8% of £1,000 (£80) added for each of the four years, so 4 x £80 = £320.

As you should first try to get your money back from the payday loan lender via our free tool below, make sure you know what you're due, so you're not short-changed. If your claim is rejected, or you're not satisfied with the final offer from the lender, it's simple to escalate it to the Financial Ombudsman Service (FOS) – see below.

In most cases, you won't be refunded for the loan itself, though in some extreme circumstances, the FOS told us you could get the remainder of the loan written off.

How to reclaim for free – but be quick

Ignore the claims management firms that say they will do it for you – they'll take a significant chunk of whatever you get back. It's simple to do it yourself for free.

If you think you've been mis-sold a payday loan, hurry up with making a claim by using our free online reclaim tool via complaints site Resolver. The risk is that if your lender goes bust – as many have – you may get little back. So get in quick before that happens.

If you complain to the payday lender via Resolver, it'll help escalate your case too. It will prompt you to contact the Financial Ombudsman Service (FOS) after eight weeks, so if your complaint's rejected, or you don't hear back or aren't happy with the final offer, the FOS will look at your case (though you must escalate it within six months of the rejection/final offer).

In the first two months following its launch in mid-October, MoneySavers used the tool nearly 12,000 times. On average, people have claimed against two lenders and so far the payouts are averaging almost £400 per claim – so it's well worth doing.

Important: If you're making a claim against Wonga, use the dedicated online form set up by its administrator Grant Thornton. For other lenders, use the Resolver tool.

Time Limit on Claims

TEMPLATE LETTER - PAYDAY LOAN REFUND

[Insert your name and address]

[insert date]

[insert name and address of payday loan lender you had your payday loan with]

Dear Sir or Madam,

Account number: [insert account number]

I have had the above account since [insert date] but believe it was mis-sold to me. [Insert reason for complaint - see below (1)]

I enclose copies of my bank statements dating back to when the first payday loan was taken out and any related documents.

I am writing to ask you to refund the interest and any charges I paid, plus statutory interest, and to delete any negative information from my credit record.

I look forward to your response within eight weeks, otherwise I won’t hesitate taking my complaint to the Financial Ombudsman Service.

Yours faithfully,

[insert your signature]

[Insert your name (printed)]

INSERT ONE OF THE FOLLOWING PLUS ANY ADDITIONAL DETAILS:

It was not made clear to me how much it would cost in total to repay the loan.
I wasn’t given full or accurate information about how and when to pay back the loan.
My finances and/or personal situation was not sufficiently checked to make sure I’d be in a position to pay back the loan (here you can take such things into account as your age, mental health, employment status, income, expenditure, proof of identity or financial history).
I was not told by the lender that a payday loan should not be used for long-term borrowing or if I was in financial difficulty.
I was not told by the lender what to do if I had a complaint.
It was not made clear to me by the lender how continuous payment authority works and my right to cancel it.
I was not told in advance by the continuous payment authority that it was going to take money from my account in this way.
The lender did not include a risk warning about late repayments in its online advert/email/text message.
When I couldn’t repay the loan the lender didn't deal with me sympathetically and positively.
When I couldn’t repay the loan the lender didn't offer to freeze interest and charges when I was unable to make payments under a reasonable repayment plan.
When I couldn’t repay the loan the lender didn't tell me about free and independent debt counselling organisations.
When I couldn’t repay the loan the lender pressurised me to extend the loan.
When I couldn’t repay the loan the lender didn't tell me about the risks of extending the loan.
When I couldn’t repay the loan the lender didn't make clear exactly how much it would cost to extend the loan.
When I couldn’t repay the loan the lender didn't check my personal finances and general situation to see if you're able to pay back an extended loan.

Rejected? Complain to the Financial Ombudsman

Top Three credit reports – all free!

Tens of thousands of people are paying for expensive subscription services when they could get all the information they need for free.

Everyone should use one of the following top three credit record checkers or, even better, all three:

MSE’s Credit Club for Experian details - http://www.moneysavingexpert.com/creditclub
Clear Score for Equifax details - https://www.clearscore.com/
Credit Karma for TransUnion (Callcredit) records – this replaces the old Noddle report - https://www.creditkarma.co.uk/

They are all free, no sneaky free first month then a high charge if you forget to cancel.

High Cost Short Term lenders – “payday lenders”

Anico Finance info@anicofinancialservices.com

Auden complaints@auden.co.uk

Bingo loans info@bingoloans.co.uk They are a lender and a broker. If they referred you to another lender, you should complain to that lender.

Cash 4 U Now info@cash4unow.co.uk

CashASAP complaint@cashasap.co.uk

Cash Converters customerservices.uk@cashconverters.com

Cash Float complaint.handling@cashfloat.co.uk

Cash Generators use the contact form on their website

Cash On Go see Peachy

CashPlus complaints@apsgroup.com

Clear Account a brand name of SafetyNet Credit, see below.

Credio info@credio.co.uk

Credit Star complaints@creditstar.co.uk

Dot Dot Loans no email for complaint, you have to write to them or use their contact form

Drafty (sister company to Lending Stream) complaints@drafty.co.uk

Early Payday Loans (EPDL) & ECash Window customercare@ecashwindow.com in administration but in February 2019 some readers were still getting refunds

Everyday Loans see Large Bad Credit lenders below.

Express Finance and Express Finance (Bromley) see Payday Express

Fast Loan UK complaints@fastloanuk.co.uk

Fernovo complaints@fernovo.co.uk

Ferratum customercare@ferratum.co.uk (emails should be sent from your registered email address)

Fortress use the Sunny email

H&T (Harvey and Thompsons) complaints@handt.co.uk

Herbert Brown complaints@albemarlebond.com

Instamoni complaint@instamoni.com

In-Sync ics.complaints@in-syncgroup.com

Kabayan simon.roberts@kbnfinance.co.uk

Ladder Loans see the Money Shop

Lending Stream has switched off its complaints emails. You have to use their web form here. Read Lending Stream stops customers complaining by email for what you can do if you think this is poor behaviour from a big lender.

Liquid Advance no longer trading. Try their debt collectors: Capital Resolve debt collectors, they have handled one reader’s complaint: complaints@capitalresolve.com

Loan Pig info@loanpig.co.uk

Mini credit If your loan was sold to Kapama/Opos, complain to them: complaints@oposlimited.com . If it wasn’t then you can talk to the Ombudsman but so far as I know Mini Credit has gone bust.

Miss Payday Customercare@Miss-Payday.co.uk

Money Boat complaints@moneyboat.co.uk

Money Hive info@themoneyhive.co.uk

Money Platform charles@themoneyplatform.com

Money Shop in a Scheme of Arrangement, see below.

Monkey Dosh complaints@monkeydosh.com

Month End Money see the Money Shop

Mr Lender complaintsml@mrlender.co.uk.

My Finance Club support@myfinanceclub.com and put COMPLAINT as the subject

My Jar generalcomplaints@myjar.com

MyKredit info@myKredit.com

My Mate now called Different Money

NextCredit in administration but still send complaints to info@nextcredit.co.uk

Oasis Finance / Oasis Payday use the Sunny email

Oakam complaints@oakam.com

OnStride see QuickQuid

Payday Advance a brand name of CFO, see above.

Payday Bad Credit complaint.handling@westerncircle.co.uk

Payday Express / Payday UK / PDUK in a Scheme of Arrangement, see below.

Paydayloansnet / PDNET complaint.handling@paydayloansnet.co.uk

Payday Store – see the Money Shop

Peachy now in administration but complaints can still be sent to complaints@peachy.co.uk

Pera Loans complaint.handling@peraloans.co.uk

Piggybank now in administration but complaints can still be sent to complaints@piggy-bank.co.uk

Polar Credit a sister brand of CashASAP complaint@polarcredit.co.uk

Provident – see Get a refund for doorstep lending as the complaints are a bit different. Contact details in that article.

Pounds Till Payday see Swift Sterling

Pounds To Pocket see QuickQuid.

Quick Quid now in administration but complaints can still be sent to complaint@quickquid.co.uk

Quick Loan Shop info@thequickloanshopltd.co.uk

Quick Loans Express complaint.handling@quickloansexpress.co.uk

Quid.co.uk use the Sunny email address

Quidie complaints@quidie.com

QuidMarket customercare@quidmarketloans.com

Safeloans no longer trading but complain to customercomplaints@sllcapital.co.uk

Safetynet Credit complaints@safetynetmail.co.uk

Savvy info@savvy.co.uk

Satsuma onlinecustomercare@satsuma-loans.co.uk

Smart Pig team@smart-pig.com

Speedloan see Herbert Brown

Speedy Cash now in administration – the deadline for complaints has passed.

Stagemount see Quidmarket

StepStone Credit customerservice@stepstonecredit.co.uk

Street UK see Track Loans

Sunny help@sunny.co.uk (if you are complaining about another brand, make it clear which one)

Swift Money Complaints@SwiftMoney.com

Swift Sterling loans before December 2015, these were from a Malta-based – see Swift Sterling & Pounds Till Payday article for more details as the procedure is not the same as for UK lenders

Swift Sterling loans from 2016 onwards these loans are from a different UK lender. Now in administration but send complaint to complaints@swiftsterling.co.uk

Tappily (sister brand to SafetyNet Credit): complaints@tappilymail.co.uk

The One Stop Money Shop (not related to The Money Shop): apply@theonestopmoneyshop.co.uk

The Quick Loan Shop info@thequickloanshopltd.co.uk

Think Finance – use the email for Sunny

THL payday@thl-uk.com

Tick Tock customerservice@ticktockloans.com

TM Advances info@tmadvances.co.uk

Track Loans loans@trackloans.co.uk

Txtloan – a trading name of MyJar so complaints@myjar.com

Uncle Buck in administration but still send complaints to info@unclebuck.tv

Wage Day Advance now in administration – the deadline for complaints has passed.

WageMe customer.services@wageme.com