Did payday loans make your finances more difficult or impossible? Those loans may have been “unaffordable” and you should not have been given them. You may be able to claim a refund of the interest you paid.
UPDATE – Wonga went into administration on 30 August. See Wonga no longer – latest news of refunds and complaints for details.
It’s easy to ask for a refund using the free template letters here. You can use these letters with any payday lender. They work if your loans were repaid on time, or late, or you still owe money.
Two special cases:
- if you are still borrowing each month, read Get help to escape from payday loans because you need to do this first.
- if you defaulted on a loan, complain to the original lender even if the debt is with a debt collector. But there are some important extra bits so also read Payday loan refunds when you still owe money.
The comments below have hundreds of readers’ stories of the payday refunds they have been given. If the lender says No, or offers too little, this article explains how to go to the Financial Ombudsman – it’s easy and many people are getting large payouts!
What are “unaffordable” loans?
If you could only repay payday loans by borrowing again or from a different lender – your payday loans were probably “unaffordable”. The regulator says:
“the borrower should be able to make the required repayments without undue difficulty, whilst continuing to meet other debt repayment obligations and reasonable regular outgoings.”
So for a payday loan to be affordable, you had to be able to repay it the next month and be able to pay your other bills and debts. If any of the following points apply, the payday lender should have realised the loans weren’t affordable and stopped lending you more:
- you often rolled loans or borrowed again soon after repaying a loan;
- your loans from a lender were increasing in size;
- some repayments were late; or
- the loan was a significant part of your income.
Were you treated unfairly?
If you told the lender you had financial problems the lender should have treated you fairly. read Payday loans: what to expect from your lender if you’re struggling which was written by the regulator. That has lists of what a lender should not have done, for example suggesting you roll a loan or borrow more money. If any of these happened to you, add them your complaint.
How much compensation can you get?
If the Ombudsman decides your loans were unaffordable, the question is when should the lender have realised this and stopped lending?
A typical decision by the Ombudsman is to say the payday lender should refund all interest after the third/fourth/fifth loan. This may be earlier if your first loans were rolled or extended a lot.
You aren’t likely to get a “full refund of all interest”, but ask for it and let the Ombudsman decide what is fair.
You don’t have calculate anything for your complaint, just ask for a full refund, see below.
Wonga and some other lenders have already written off some loans. You may still be able to get compensation if you had earlier loans that you repaid. Again just ask for everything and let the Ombudsman decide. Simple!
If you were treated poorly when you told the lender you were in difficulty, then add something like: “I would like to ask for a refund of interest and charges for all the loans I had. I would also like additional compensation for the way you mishandled my situation when I told you I couldn’t repay a loan.”
So how do you claim a refund? There are three steps:
Step One – get the facts about your loans
If you know your loan details (from your emails, bank statements, credit report, or your history on the lender’s website) you can miss this out and write the full complaint letter in Step Two. Do make sure you have a copy of the details on your own PC or printed out – lenders have been known to delete credit records and online histories when someone complains!
To get details of your loans, email the lender (see this list of email addresses for complaints) and say:
To help me explain the details, I want you to send me a list of my loans, showing for each loan when it was taken out, how much interest and charges you added and what I repaid. I understand you are not allowed to charge me for sending this information.
If a loan was later sold to a debt collector, please inform me of the date of sale and the name of the debt collector. [delete this sentence if you know none of your loans were sold.]
You should never have given me these unaffordable loans. I am asking you to refund the interest and any charges I paid, plus statutory interest, and to delete any negative information from my credit record.
You are entitled to be sent a list of your loans within one month. This email starts off the affordability complaint – the clock is now running and the lender has to reply to your complaint (not just send a list of loans) within 8 weeks.
Step Two – full complaint asking for a refund
When you have your loan details, you can send in more details about your complaint. This is easy – you don’t need to calculate what refund you should get or quote laws.
Here is a template for you to change or add to. It needs to tell your story because everyone’s case is different.
EITHER (if you didn’t send a step one email) I am making a complain to you about irresponsible lending and asking for a refund of interest on the loans you gave me.
OR (if you sent the step one email) I want to add some more information to the irresponsible lending complaint which I sent you on dd/mm/yy.
I have had x loans from you between date and date. [if you don’t have a full list give rough date eg “I borrowed a lot from you in 2013 and 2014. I would like you to send me a list of my loans, showing for each loan when it was taken out, how much interest and charges you added and what I repaid. “]
The repayments to you took so much of my wages that I had to borrow again.
For this period my income averaged about £x a month.
[If you have a family, add some details eg We have two small children. We had child benefit and credits which averaged about £x a month.]
My living expenses were roughly: rent/mortgage £x. Council tax £x. Utilities and bills £x. Transport costs £x. Clothes £x. Food, toiletries, nappies £x. Child expenses £x Other debt repayments £x. Total £x per month.
This shows that there was no way I could afford these loans. When I repaid them, I had to borrow again to get through the next month.
You should have realised from the number of times I borrowed that my debt problems were getting worse. It was not responsible to continue to lend to me. [Add more details eg how often you borrowed or rolled loans if you know them, how the amount borrowed generally went up etc]
[Include/change this if your credit record would have shown big problems: My credit reports would have shown my other debt repayments and problems including late payments/defaults /CCJs/debt management.]
You should never have given me these unaffordable loans. I am asking you to refund the interest and any charges I paid, plus statutory interest, and to delete any negative information from my credit record.
[Include this if some of your loans are over 6 years old: I only found out I could make this sort of irresponsible lending complaint in [April 2018]. I understand the Financial Ombudsman will consider all my loans, including those that are more than 6 years old.]
Add any other points that help tell your story such as:
- “I took out another loan with xxxx to pay you.”
- “Sometimes I borrowed to pay the rent and then had to top-up to get money for food.”
- “After I had rolled the loan twice I was so worried about the interest that I repaid it even though this meant not paying my council tax.”
Don’t worry that the lender will say you should have cut back on your living costs, just put down your normal expenses. You don’t need to include evidence about your expenses.
Some common situations:
If you owe money to the lender, unless you can afford to make this months payment without borrowing again, cancel the CPA to the lender at your bank. Also read the Stop making payments? section in Payday loan refunds when last loan not repaid. If you want to stop payments or to offer a lower affordable amount, add a sentence to your complaint saying this.
If your loan was sold to a debt collector you still complain to the original lender but also tell the debt collector that you are disputing the debt. Just carry on making any payments to the debt collector if they are affordable.
If you only had one or two payday loans from this lender remove the bits about borrowing more often from the sample letter.
Send credit record and bank statements?
Some lenders ask you to send them a copy of your credit record, your payslips or bank statements. If you send bank statements there is no need for payslips.
Some lenders do seem to use them when deciding if the loans were unaffordable and it may make your case more likely to be settled with the lender without the need to send it to the ombudsman.
But some people feel these are personal and they don’t want to send them to a payday lender. If you don’t want to send them, tell the lender you will send the Ombudsman any information that is needed.
Step three – go to the Financial Ombudsman
If the lender rejects your complaint or offers you a small amount, don’t be depressed – you may still have a good case, they are just hoping you will go away quietly!
Thousands of these cases have been sent to the Financial Ombudsman and there is a higher success rate for payday loan affordability complaints than any other type of complaint!
And as one reader said, They couldn’t be any nicer.
Should you give up or go to the Ombudsman?
Think about sending your complaint to the Financial Ombudsman if:
- the lender rejects your complaint or doesn’t reply within eight weeks;
- the refund offered is too low; or
- they refuse to consider loans over 6 years old or which have been sold to a debt collector.
Some lenders try to make your case sound bad when it isn’t. People have had thousands of pounds refunded after a complete rejection! Ignore any of these:
- they relied on your loan applications and you didn’t give the full facts – see Lender says I lied for more about this;
- you repaid some loans early – so what? this doesn’t prove the loans were affordable, just that you were trying to save interest;
- your borrowing didn’t go up every time – also irrelevant, what matters is that you kept borrowing;
- you had a good enough credit score or they didn’t legally have to check your credit record.
Deciding if an offer is good enough
If you are offered a refund on only a few loans, don’t accept if you think you paid a lot more than that in interest.
Knowing how much you paid in interest helps you decide if an offer is reasonable or not. Some lenders offer a few hundred pounds to cases which eventually get ten or twenty times as much from the Ombudsman.
If you aren’t sure, ask in the comments below this article. Accepting an offer settles your whole complaint – you can’t change your mind later.
Don’t worry that you will “lose” a small offer from a lender – this doesn’t happen.
An offer to write off your current balance may be good or it may be very poor as you should get a refund as well, see Refunds when you have a balance owing for details.
If getting defaults or late payments removed from your credit record is important to you, make sure you understand and are happy with what the lender is proposing to do before you accept an offer.
It’s probably pointless if you only had one loan from a lender, not rolled, which you repaid on time. There isn’t much point in taking every case to the ombudsman.
Don’t delay too long – there is a 6-month time limit after a lender rejects your complaint to send the case to the ombudsman.
How the FO works
The Financial Ombudsman has a two-stage process. The first level is a FO member of staff called an Adjudicator. The Adjudicator will come to a decision, but unless both sides accept it, the case goes to the second stage where it is considered by an Ombudsman. Most complaints are settled at Adjudicator level – there are 10 times as many Adjudicators as Ombudsmen.
How to send a complaint to the FO
Caroline Wayman, the Chief Ombudsman, says:
It’s really OK to phone up and say, ‘I don’t think it was fair.” It’s not court; you don’t have to turn up with your ‘heads of claim’, you don’t have to write a fancy letter. Tell us your story and we will do the rest.
Their website explains the different ways to send a complaint to the Ombudsman. I like the “do it online” option which takes you through your complaint step by step and you can attach other information, such as the reply you have had from the lender. You could add some more details, for example, if you disagree with what the lender replied to you.
Put in a separate complaint about each lender.
If some loans are more than six years old, add a bit explaining why you are complaining now, not years ago. Most people knew they were in financial trouble when they were borrowing but had no idea that they could make an irresponsible lending complaint. So say how and when you found out that an affordability complaint was possible (a friend sent me a link about this, I saw it mentioned on Facebook, whatever).
What happens after you have sent a case
You will normally be contacted within a couple of weeks. If you didn’t supply a copy of your credit record and your bank statements you will be asked to send these.
You can still get bank statements even if your account is closed. If your bank wants to charge you a lot, say you need them for a complaint at the ombudsman about a payday lender and many banks will reduce the charge.
This initial contact is not when an adjudicator picks up your case and starts looking at it. That won’t happen until the payday lender has replied – typically it is between 3-5 months at the moment.
A few problem cases
- Don’t apply if you are bankrupt now or have been bankrupt in the past – any refund will go to the Official Receiver, not you.
- Don’t bother if you are in an IVA as refunds will go to your IVA firm not to you. If your IVA has finished the refund may still be sent to your old IVA firm or it may be sent to you.
- Don’t apply if you are in a DRO now, getting a refund may mean your DRO is cancelled!
- You can’t go to the Ombudsman with non-UK authorised lenders – the main ones were Swift Sterling and Pounds Till Payday, see that article for your options.
Need some help?
If you need help to complain, go to your local Citizens Advice, they will help for free.
Don’t use a claims management company. They are expensive and may be incompetent. A good claim involves telling your own story, not sending a standard letter!
Check out the Comments below – you could ask a question there. The comments are split into pages – use the “older comments” and “newer comments” buttons at the bottom to read them all.
Wonga refunds now they have gone under
QuickQuid – how to get payday loan refunds
PDUK, PD Express & Money Shop refunds
Steve says
Having a back and forth with LendingStream at the moment…
I sent them my Stage 1 complaint on the 23rd July, and they responded on the 14th August. Sent Stage 2 letter on 15th August.
8 weeks went by on the 17th September, so contacted them. They said the complaint was submitted on the 15th August so still within their 8 weeks. We’ve now gone back and forth on this a few times, even though I’ve told them I’ve gone to the FOS.
Is this one of their delay tactics?
Sara (Debt Camel) says
Correct to send it to the Ombudsman. Don’t waste any more effort arguing with LS, if they get back to you with a decent offer, you can withdraw the FOS complaint.
Sarah says
Yes.
I am having the same issue with them at the moment, I gave them an extended 5 day grace period after the 8 weeks to provide me with either a final response or an update
Once those 5 days are up I’m referring to FOS
Jen says
Hi Sara and everyone I just got an e.mail from clear score saying you can check old credit reports, I logged in & mine goes back to August 15, it gives your score at that time, month by month and any factors that change it, could be useful when looking to evidence old reports
Sara (Debt Camel) says
True. But Clear Score isn’t a particularly useful report for payday loan affordabilty complaints as many payday lenders do not report to, or consult, Equifax. Noddle is a better report to use.
Anna says
Just had a reply from PAYDAY UK. They are upholding my complaint and refunding me 14 out of the 16 loans that I originally complained about!! (Loans 1 and 2 were just out of the 6year time frame.)
They were 1 week and 1 day over the 8 week threshold but am pleased that I gave them a couple of weeks grace before referring to FOS.
Total redress to pay is £6429.82!!! Has anyone emailed back to say they accept and provide bank details?? Roughly how long before you’ve received your refund?
Thank you Sara and your template letter! And to everyone for your help and advice.
Now to do my Quickquid complaint.
John M says
Hi Anna,
Pay Day Express (same team dealing with complaints) were about 4 working days so send the email today and you should receive it some point next week.
Well done!!!
Anna says
Thanks John. Did you email them?
Anna
John M says
Yes I did email them with my acceptance
Mark says
Anna,
Well done!
I emailed and posted (by recorded delivery), my signed acceptance on 14/09 and received the money into my account yesterday, so within a week.
A couple of other people have said similar, so the drinks could be on you next weekend! :-)
Anna says
Haha… fingers crossed Mark! Thank you
Anna
Jasper says
Well done! That is a great result!
How long did it take from start to finish with PDUK/Payday Express?
I am at the six week mark and have heard very little other than some holding emails at the 4 week mark. Not even had the list of loans that I requested (although I have the details of ones within six years anyway and if they are not considering those beyond that, I am not too concerned).
Anna says
Hi Jasper. Mine has taken 9 weeks and 1 day from initial email. I did have all my loan details by going through my emails and checking against online banking so detailed this all in my initial complaint. Like you I had an email after 2 and 4 weeks saying they needed more time and again at the 8 week mark. And then the final response this morning.
Anna
Jasper says
Thanks Anna.
Looks like I should settle in for a couple more weeks’ wait then! Hopefully I will get a decent result at the end of it.
Lo1 says
Great news, and gives me hope. They are 8weeks +10 days, will give them until mid next week and then off to FOS if still nothing
Hmb says
So I have received a response from Lending stream today after I gave them a nudge they were over the “56 day” deadline. Of course, and in my no means a surprise they have come back to me and said that they have carried out an investigation and they do not believe they loaned to me irresponsibly. I have gone back with my thoughts, I was very polite even though I didnt want to be. I have asked them to reevaluate my complaint and I have also given them an offer in which I think is acceptable. Ive also given them till Monday next week to respond. I am more than happy to take it to the Ombudsmen and wait for an adjudicator as I feel I have a strong case for complaint so I will let you all know how I get on!
Mark says
Hmb,
Wow, you’re far more reasonable than me!
As soon as I got all my final response “we did all relevant checks……blah blah………we rely on the information you …….blah blah…….complaint rejected!” letters, I instantly commenced a half hour angry typing session on the FOS website.
Your way is better, as there are LOADS of ppl that have posted after successfully negotiating a slightly reduced offer without having to use the FOS and the inevitable 2-6 month wait.
Well done and keep us posted.
Hmb says
It was hard I have to say, they tried to spin me a yarn that it was my fault which I expected to be honest! Lets see what happens – I have all the time in the world. Its Sunny I am really invested in getting the money back from – they had alot from me and havent even acknowledged my email 3 more weeks to wait! Not quite sure how they will try to get out of the 21 loans in 18 months they gave me!
Mark says
Sara,
I’M FUMING!!!!
I’ve just got my clear score report and there is a credit search (for credit quotation purposes – so a full search!), on there from UK Credit (one of the loan companies I have complained about), dated 10/09. This approx. 3 weeks after I sent the “irresponsible lending” complaint to the FOS!!!!
This was not initiated by me, I’ve not applied for any credit this year.
I’m certain UK Credit have processed another credit check in order to defend their “irresponsible lending” complaint and also provide the FOS with any missing “creditworthiness and affordability” documentation that they did not complete at the time of the ACTUAL loan application (Nov 2017).
I’m guessing that they have already applied to remove the search rom my record, in the hope that I would never know this happened………..
What the hell do I do about this?!?!?!
Sara (Debt Camel) says
Have you asked UK credit for a Subject Access Request for a copy of all your personal information? If not, do this now! If this is a guarantor loan, also read https://debtcamel.co.uk/how-to-complain-guarantor-loan/. You may also want to read https://debtcamel.co.uk/refunds-large-high-cost-loans/.
Put in a new written complaint to Uk Credit saying they have incorrectly added full credit search to your credit records, enclose a screenshot showing this, and ask for it to be removed and for £50 compensation.
Mark says
Sara,
Yes, I got a FSAR weeks back (remember I forwarded you a 10 page letter where I argued every single point on the income/expenditure form and stated that it breached FCA reg’s Yes, that was me :-))
My concern is that they didnt enclose a single peice of credit check documentation in that FSAR, so I don’t believe they either did a check or used any of the info, so I think they have done this check so they can now provide all the missing info to the FOS, as this credit check was done exactly 3 weeks after I got the FOS involved!
If they successfully pull that off, they can pay me £50 for the unauthorised credit check issue, but then successfully defend the £2k interest/fees irresponsible lending compliant with all the additional info they got.
I don’t want to go all “tin foil hat” here, but it’s a bit too much of a coincidence isn’t it?
Mark says
Sara,
I already have the FSAR I did when starting the complaint. Remember me? I’m the one that sent u that 10 page detailed assassination of UK Credit’s income and expenditure form?
My concern is they can now send a load of credit check info that they say they got at the time of my loan application, when it was actually from a check they did 2 weeks ago. If the FOS swallow that, they get out of a £2k affordability complaint and just send me £50 for doing another credit search “by mistake”.
And if Laura was replying to me (below), these companies have hit a new low and surely means they aren’t just breaking regulations, surely there’s a law to say that can’t just do a credit check whenever they want?!?!
Soph says
Hi Mark, UK credit have done exactly the same to me but I didn’t think much of it at the time. I complained to them around the beginning of May and they performed a credit check on the 1st June. My complaint is currently with the FO also. I think I will make a complaint to UK credit and also bring it to the FO’s attention. I am worried now also.
Laura says
They did the same to me, and on the response letter they said that I have taken out more credit blah blah blah since I got their loan…umm yeah to help pay their loan lol. With the FOS now.
Mark says
Laura,
Are you replying to me????
If so, you have in writing that a lender processed an unauthorised credit check to help get details in order to defend themselves against your complaint????
Laura says
Sorry Sara, reply was to Mark regarding UK Credit complaint..and thanks Mark didn’t realise that would be classified as unauthorised.
Mark says
Wow. I think we may have just stumbled upon a pattern of intentional regulation breeches by a lender!
I’ve just checked and the credit search was done 3 weeks after I referred to the FOS and just FIVE DAYS after the FOS wrote to UK Credit!!!
This is no way a coincidence. Thoughts Sara???
THANK YOU LAURA AND SOPH. I thought I was going crazy until u replied.
Soph says
Hi could anyone be so kind and provide me with a few lines of how I word a subject access request? A lender (UK Credit) has undertook a full credit check 3 weeks after my initial complaint so I want to know what information they now have and whether they’ll be using any of this to defend my complaint which is currently with the FO and I will be making a second complaint against them also! Many thanks
Mark says
Soph,
Give me half hour and I’ll post my FSAR letter. It’s the least I can do.
Mark
Soph says
Thank you so much. I was fortunate to pay my loan off early with the refunds I have received so far but have still paid them over £4k in interest. I’m worried now that they are going to somehow use their unauthorised credit search to their advantage in someway :( I had £10,000 worth of debt when they gave me a £6k loan so whilst I consolidated what I could I still couldn’t afford their repayments on top of the additional debt I already had and so the amount I borrowed afterwards to keep up with their repayments was a ridiculous. Thanks again
Mark says
Soph,
I posted that FSAR letter, I think some posts take longer to appear, if it doesn’t upload by 7pm, I’ll re post.
I have today sent UK Credit and the FOS a letter detailing what I know and what I suspect. Asking them to explain themselves and provide the legal/regulatory authorisation they required to do the credit check.
I can’t believe a lender has gone this far outside the regulations (and I suspect the law), to defend themselves.
Class action lawsuit anyone? ;-)
Mark says
Please take this letter as a Full Subject Access Request (FSAR).
As such I require all copies of all personal information your company have on me.
That is every piece of information (both computer stored and in paper format), from my very first contact with you up until the date you actually process this request.
Under GDPR rules I understand you have 4 weeks to send me this information free of charge.
By all means email this information to me at xxxxxxxxxxxx@xxxxx.com if that makes it easier/quicker/cheaper for you.
If this is not possible, then please post to me at the above address via recorded mail.
Hope that helps…..Mark
Sara (Debt Camel) says
Hi Mark, Laura, Soph,
In these situations I am a great believer in Hanlon’s razor – never ascribe to malice what can be adequately explained by incompetence.
Although it’s possible UK Credit could be intending to fake a previous credit check from the one they have now done, it is more likely that someone in their complaints compartment was told to do some detailed research on your complaints and messed up by doing the wrong sort of credit check.
In your case Mark, you already have a SAR which didnt show an earlier credit check, so they will have difficulty explaining to FOS if they try to claim that there was an old one they didn’t send you.
I suggest Soph and Laura both ask for SARs covering all their personal data now and that all 3 or you put in a complaint about the credit check, enclose a screen shot showing its date, and ask for it to be removed and to be given compensation. This is then evidence to FOS about the recent check if that turns out to be needed.
And it would be good if you all keep each other informed here about how your cases go! I assume all of you have guarantor loans?
Mark says
Sara,
As always, brilliant advice!
Minor point though, UK credit did process a credit check at the original application stage, but you are right, they omitted all details/info from the FSAR documents they sent me. My worry was that they use some information from the credit check a couple of weeks ago to cover up the missing info when in discussions with the FOS.
That being said, I’m sure you’re right. I guess we need to wait and see how many other come forward with the same issue before we jump to conclusions.
Thanks again Sara and everyone and I will keep the forum updated.
Soph says
Thank you so much for that Mark I really appreciate it, I will be getting straight onto them tomorrow. And thank you for your advice to Sara. Yes it’s a guarantor loan, one of the worse mistakes I’ve ever made, trying to get myself out of a mess and it just made it 10 times worse. I will of course post on here what response I get back from them and the outcome with the FOS. It’s with an adjudicator now so hopefully not that much longer. Thank you again, this website has kept me sane through some of the hardest months!
David askew says
Hi, could somebody please advise how I might proceed with Satsuma who seem to be just messing me about after I sent them an initial email asking for the details of my loans. I have sent them my name, DOB, address, email, bank name & sort code and last 4 digits of account number. Yet they have sent me this email….
Thank you for your email,
Unfortunately we have been unable to identify you, as the details you have provided do not satisfy our identification and verification criteria.
In order to assist you further you will need to speak to our Customer Care Team on 0800 694 0004.