Many payday loan companies are facing irresponsible lending claims. The Good Practice Customer Charter and Financial Conduct Authority rules required affordability checks and for key information to be given to borrowers. If they have not done so you could have a valid claim for mis-selling.
With over 70% of payday loan complaints being found in the borrower’s favour, it is worth considering a claim if you struggled to pay, were forced to take additional lending to cope with household bills or did not fully understand the implications of your borrowing.
What is covered under mis-selling of a pay day loan?
Examples of how mis selling could happen could include:
- If the lender did not make clear how much the total cost of the loan was, including fees and charges.
- The how and when or repayment methods were not explained, including the use of a continuous payment authority (CPA’s) through your debit or credit card for repayments.
- Suitable affordability and background checks were not carried out. Including considering, your age, your employment status, income, expenditure and financial history. This can also include proof of identity and mental health information.
- You were not advised these are not suitable long-term borrowing solutions or if you are in financial difficulty.
- You did not receive information on how to complain if you had issues with your loan.
- Risk warnings were not clear about late repayments in advertising, via email, text or online advertising.
If any of these apply or you feel there were other misleading factors, such as not being treated fairly when you advised your lender that you were in difficulty, then you may also have grounds for redress.
How Long Do I Have To Make A Claim?
You can claim for current loans or loans that you have paid off. The time limit is generally within six years of the date you took the loan out. In some instances the Financial Ombudsman may consider claims older than six years. You will need to contact them with details for a decision to be made.
How Much Does It Cost To Make A Payday Loan Claim?
If you make the mis-selling request yourself directly to your lender, then you will not pay a fee or have any money deducted from a redress payment. There are many companies offering assistance with claims and they will take a fee from any pay out you may be entitled to. So be sure you understand this before you give authority to claim on your behalf. You can find many online templates or simply write to your lender to start your claim.
You can refer your case free of charge to the Financial Ombudsman should you need to if you are not happy with the outcome or your claim is for lending over 6 years old.
What will happen if my payday loan claim is successful?
You can expect to be put back to where you should have been had you been treated responsibly and fairly. You will still have to repay the loan sum, but interest, fees and some charges may be refunded.
Hopefully, this article has given you the information you need to approach your lender. You may also benefit from debt consolidation advice to reduce your debt repayments and free up much-needed cash.