Did your payday loans cost so much when you repaid one you had to keep on borrowing?
You can get a refund of the interest you paid on unaffordable loans.
It’s easy to ask for a payday loan refund using the free template letters here. The letters work if your payday loans were repaid or you still owe money.
The comments below this article have thousands of stories of the refunds people have got using these letters. It is a great place to ask questions!
Contents
What are “unaffordable” loans?
Was a loan affordable just because you repaid it?
No! If paying a loan left you so broke you had to borrow again – from the same lender or a different one – it was 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.”
That means a payday loan is only affordable if you repaid it on time and you could still manage to pay your other bills and debts.
Payday loans are meant to solve a short-term problem. If you kept repaying one then getting another loan soon after, the lender should have stopped lending to you.
If the loan was small and it was the first loan or second loan from a lender, the lender may not have realised the loan was unaffordable for you. But it was irresponsible lending to just carry on giving you more loans.
Many lenders ignore obvious signs of problems such as your loans increasing in size, or borrowing again soon after repayment.
How much compensation can you get?
You don’t have to calculate this. Just ask for a refund from the lender and see what you are offered. This is simple and it works well.
The Financial Ombudsman has seen tens of thousands of payday loan affordability complaints.
A typical decision by the Ombudsman is that the payday lender should refund all the interest you paid interest after the third, fourth or fifth loan.
But if your first loan was large, or was rolled over several times you could get a refund from just one loan.
Which lenders can you get refunds from?
You can complain to lenders that are still in business, even if they are no longer lending. These include:
Lending Stream, Cash Converters, CashASAP, Drafty, Dot Dot, Fast Loan Uk, Fernovo, Fund Ourselves, Kabayan, LoanPig, Mr Lender, Moneyboat, MyKredit, My Finance Club, QuidMarket, Savvy, The Money Platform, WageMe, Wizzcash,
See this email list for payday lenders for a longer list and all the contact details to use.
If the lender has gone into administration, including CashForUNow, Piggybank, Ferratum, Oakam, Safetynet Credit, Tappily:
- make a claim to the administrators – there is normally a simple form for you to complete, see the lender’s website for details – but there will be a time limit for doing this.
- you may not get much cash back but this is very easy to do. A balance may be reduced or cleared even if there is no cash to distribute. And if you win the complaint any negative marks on your credit record will be removed.
It is probably too late to make claims to other lenders who gave up years ago, see this list.
For longer-term loans there are better template letters to use on other pages:
- doorstep lenders and guarantor lenders,
- Loans2Go – the worst loans in Britain!
- 118 Money, Likely Loans, Bamboo, car finance, bank loans and other long-term loans.
Do this before, before you send in a complaint
Doing these things now will make your life easier later.
Get a copy of your TransUnion statutory credit report and keep it. After complaints are started, sometimes loans are deleted and you may want the full report if you later have to go to the Ombudsman.
If you still owe money to the lender, read Will an affordability claim hurt my credit record, and other questions. These looks at your options for stopping paying, the effect on your credit record etc.
If the rest of your finances are difficult, look into a Debt Management Plan (DMP) where you make one affordable payment a month to StepChange. This gets you into a safe financial position as these affordability complaints can take a long time to go through at the Ombudsman. Winning a complaint then speeds up the DMP.
Unless you can afford to make this month’s payment without borrowing again, cancel the CPA to the lender at your bank. Otherwise the lender may take the money and you will be in a mess.
If your loan was sold to a debt collector you complain to the original lender. But also tell the debt collector that you are disputing the debt. It is a good idea to carry on making payments to the debt collector if they are affordable.
Start your complaint & get loan details
Find the lender’s email address for complaints from this list.
Put “AFFORDABILITY COMPLAINT” as the subject of your email:
You should never have given me these unaffordable loans. Paying you each month left me with too little money so I had to keep borrowing 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 all my other debts and problems including late payments/defaults /CCJs/debt management.]
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.
[delete this sentence if you know what all your loans were.] I know the difficulties your loans have caused me but I no longer have all the loan details. Please send me a list, showing for each loan when it was taken out, how much interest and charges you added, and what I repaid. This will enable me to assess any refund you offer me.
[delete this sentence if none of your loans were sold.]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.
Some ways to improve this
Add any other points that help you describe what happened to you. You don’t need to list the loans – the lenders knows them.
Some examples:
- “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.”
- if you weren’t treated fairly while you were borrowing or when you could not make a payment, add a bit about this.
You can attach bank statements if you like, This is a good idea as these show how unaffordable the loans were for you. If you have gambling showing, this helps your complaint, it doesn’t harm it.
I don’t know if many lenders actually read what you send them. I
it’s easy to make these complaints – you don’t need to calculate what refund you should get or quote laws.
Only one loan?
The template refers to multiple loans because that is what normally happens with payday lenders.
When you only had one loan and it was large, read Refunds from large loans and use the template there.
If you only had one loan and it was small, this is going to be a very difficult complaint to win. If you have borrowed once or twice from 5 leaders, that is much more difficult to win an affordability complaint than having 4 or 5 loans from two lenders.
Waiting for a reply from the lender
This email starts your affordability complaint.
They may send the list of loans first and later respond to your complaint. So don’t be surprised if you get sent info on the loans but nothing about your request for a refund.
When you get your loan information, you can send in more details about your complaint if you want. You don’t have to do this, your complaint has already begun and the lender has to reply.
The lender should reply to your complaint within 8 weeks from when you send the email, not when they acknowledge it. Make a note in your diary for 8 weeks time and chase the lender up if you don’t get a reply.
Don’t be surprised if you have to wait until the end of the 8 weeks to get response – this is common.
Send your bank statements or other information?
Some lenders ask you to send them a copy of your credit record, payslips or bank statements.
Credit record – the lender can check your credit record themselves if they want. But you should download a copy of your credit record asap as the Ombudsman will ask for it. Don’t put this off, the sooner you get a report downloaded, the further back it goes which is good.
Don’t send payslips – they won’t help an affordability complaint and the ombudsman never asks for them.
It is a good idea to send bank statements. But think twice about the cost of copying and postage if there are a lot. Some lenders seem to ignore them if you do send them.
Again this is a good point to get those bank statements even if you do not want to send them as they will help an Ombudsman claim a lot. You can get them going back at least 6 years even if the account has been closed.
Lender says No or makes a poor offer
If the lender rejects your complaint or offers you a small amount, don’t be depressed. You may still have a very good case!
It is easy and free to send your case to the Financial Ombudsman where many thousands of people have won their payday loan complaints, despite being rejected by the lender.
Give up?
Some lenders try to make your case sound bad when it isn’t. People have had large amounts refunded after a complete rejection!
Just ignore any of the following comments, they do not mean you have a weak case:
- they relied on your loan applications and you didn’t give accurate facts – see Lender says I lied for more about this;
- you repaid some loans early – this doesn’t prove the loans were affordable, just that you were trying to save interest;
- your borrowing didn’t go up every time – 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 – if you only had one or two small loans that is true. But if the loans were large or you kept borrowing, they should have looked more closely;
- your loans are over 6 years old – the Ombudsman will look at these even if the lender says they won’t!
A good enough case to go to the Ombudsman?
If you don’t know what to do, 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 by going to the Ombudsman – this doesn’t happen.
Some points to think about:
- if you are offered a refund on only a few loans, don’t accept it if you think the lender should have realised a lot of the other loans were unaffordable;
- an offer to write off your current balance may sound convenient … but it may be very poor if you should get a refund as well;
- if getting defaults or late payments removed from your credit record is important to you, are you happy with what the lender is proposing to do? Don’t assume your credit record will be cleared if the lender didn’t mention this.
One or two loan cases are hard to win at the Ombudsman. It’s probably best to give up on one or two loan cases unless:
- the loan was large. Here is one single loan case that was won even though it was an installment loan and the borrower had a good income. And another single loan case for a loan of £1,000. You can win cases for smaller amounts if the repayment would have been a large amount of your income; or
- you still owe money.
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. When you aren’t sure, send the complaint to FOS. This is easy to do – let FOS make the decision.
How to send a complaint to FOS
Put in a separate complaint about each lender.
Don’t wait until all your lenders have replied before sending the first one to the Ombudsman!
FOS’s “complain online” option is easy and takes you through your complaint step by step.
You can just copy what you said in your complaint to the lender. You can add more details, for example, if you disagree with what the lender replied to you.
If some of your loans were over 6 years ago, tell the Ombudsman when and how you found out about these complaints. For example:
“I knew the loans were causing me difficulty in 2016, but I thought this was my fault for being bad with money. I didn’t find out that the lender should have checked the loans were affordable until June 2022 when my brother told me about these claims/I saw an advert from a claims company on Facebook/I read an article about these claims” – change this so it is right for your case!
Things to attach:
- the reply you have had from the lender.
- bank statements if you have them. Ideally from 3 months before your first loan until the last loan was repaid or you defaulted on it. This strengthens your case, showing how unaffordable the loans were. You can still get bank statements even if your account is closed – if you don’t have them, start the process of getting them now, don’t wait until FOS asks for them.
- a copy of your TransUnion Statutory credit report.
What happens after you have sent a case to FOS
You will normally be contacted within a couple of weeks and asked for a copy of your credit record and your bank statements if you haven’t sent these. If you have sent these on one complaint, then when you complain about a different lender they will use the ones they already have.
After this initial contact, your case will wait for the lender to send FOS your case file and then wait to be picked up by an adjudicator who will make a decision on it.
If you are still making payments to the lender, tell the lender you want to reduce these to an affordable amount. This will make waiting for an Ombudsman decision much less stressful for you.
The Financial Ombudsman has a two-stage process. Most cases are settled by the first “adjudicator” stage but about 10% go to the second “Ombudsman” stage.
A few problem cases
Don’t ask for a refund:
- if you are bankrupt now or have been bankrupt in the past – any refund would go to the Official Receiver.
- 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.
- if you are in a DRO now, getting a refund may mean your DRO is cancelled!
More help
You can ask a question in the comments below – you may get a reply from someone who has been in your exact situation.
Don’t use a claims management company. They are expensive and often incompetent. It’s easy to do this yourself and you can ask questions below and get replies from other readers who have done this.
Card & catalogue affordability complaints
Can you get an overdraft refund?
Could a Debt Relief Order help you?
Matthew says
Hey Sara
I just had a email back from fernovo (Quidie) they have not accepted my complaint for a refund for unaforable lending . But they have offered me a goodwill gesture of £147 if I withdraw my complaint to come off my remaining balance a loan of £200.
I have had 9 loans over the course of 48 months ,With a total of around £1000 intrest .
They were saying it was affordable but why would they offer me this ? If I’m willing to withdraw my complaint ? Should I accept it ?
Thanks
Sara (Debt Camel) says
what is your current balance?
Matthew says
£212 it says on my account
Sara (Debt Camel) says
ok, the 9 loans – were they generally increasing in size – could you list the eg 100, 100, 150, 250, 100, etc
how large were the gaps between the loans, between repaying one and taking out the next?
Matthew says
6/9/2019 £200
2/12/2019 £300
24/2/2020 £300
12/05/2020 £100
12/6/2020 £100
25/01/22 £400
19/01/2023 £400
8/06/2023 £ 150
1/9/2023 £200
They were the loan dates
Sara (Debt Camel) says
and how long were the loans – 1,3,6,12 months?
Matthew says
They are all different but mostly were 3 month loans
Sara (Debt Camel) says
how long was this loan 25/01/22 £400
What other debts do you have at the moment apart from this payday loan – have your other debts been increasing?
Matthew says
Just shy of 6 months that one , just one other payday loan , with credit cards and a bank loan . They have been going up and down the debt
Sara (Debt Camel) says
I think you may have difficulty winning this case at the Ombudsman. Some of the loans have been very small and there have been some largish gaps.
I think you need to stop taking payday loans! Talk to Stepchange about a debt management plan for your debts, including the remains of the current loan once they have reduced the balance.
You could also look at affordability complaints about the bank loan and credit cards, see https://debtcamel.co.uk/tag/refunds/ for articles with templates to use.
Matt says
Many thanks
Danny says
I complains to quidmarket for irresponsible lending after having two loans, they didn’t upheld the complaint but offered to remove the information from my credit report, I declined that offer and said I will go the FOS, they then asked me what will be a reasonable settlement, I said all my interest repaid back to me from my second loan which was £598 . They have now responded with this reply,
I think they know the FOS will upheld my complaint, any advice what to respond? Or a dept the £100??
Good afternoon,
Thanks for contacting us back.
We have discussed your case and reviewed the resolution provided. We have then reviewed your request for an amicable settlement of your complaint.
We feel with the offer provided within your resolution we have acted fairly based on the information you provided. And the information we obtained through the credit reference checks via our underwriting team.
We also agree our offer provided was fair and amicable based on this information. We still agree with our decision as stated in our final response. However, we are willing to offer a non-negotiable offer of £100 as a gesture of goodwill. And to remove your loans from the credit reference agencies.
If you wish to accept this new revised offer, please respond back and provide your account number and sort code for the redress to be repaid.
Hope this email finds you well.
Sara (Debt Camel) says
how large were each of the loans? what was the gap between repaying the first loan and taking out the second loan>
Sarah says
Hi Sara
I have tried to go through all the comments to find one on dot dot loans but I can’t, some similar situations though. I had a huge problem gambling between 2020-2022. During this time I took out 20 loans. The worst year was 2021 which was x8 loans (3 with dot dot loans).
Loans with dot dot were:
29.1.21 – £600 over 9 months not upheld. Closed on 18.3.21 early, they say the £400 saved on interest is a rebate.
11.5.21 – £300 over 6 months, not upheld. Finished paying on time November 21.
2.12.21 – £500 over 9 months, paid back on 27.12.21, they say the £400 saved on interest is a rebate. Upheld but only to remove this loan from my credit file.
I only paid these back early with other loans.
Others loans at the time were:
January 21 X2 payday loans = total £1200 (one rejected with cash4unow)
Large loan 18/3/21 for £10k Neyber, used to pay others off.
Fernova loan was then on the 27/3/21, partially upheld.
I have a much longer list but this is just some around the time, plus 3 catalogued accounts and 4 credit cards.
I rent my home, I’m now in a DMP with stepchange since July 2022.
Also waiting for the amigo decision from a 10k loan from 2019 still paying.
Do you think it is worth sending the dot dot loan one to FOS? There response said I should have told them I was struggling/gambling and paying back early doesn’t show unaffordability.
Sara (Debt Camel) says
Have you added up the interest you paid on each of the dot dot loans? That is the total you actually in monthly charges plus settlement paid less the amount you borrowed?
Hopefully the Amigo claim will be upheld.
Have you made an affordability complaint about the Neyber loan?
The catalogue accounts and credit cards, did any of them increase your credit limit at a time when you had only been making minimum payments?
The payday loans may have been a higher interest rate but they were short term and if you settled them early that will have reduced the interest you paid – other credit may actually have worked out more expensive and be easier to win affordability complaints about and give yo7 a bigger refund or balance reductions StepChange.
Sarah says
The interest is below once i have deducted what i borrowed.
January 21 – Paid back early in March 21 – paid £149 interest
May 21 – Nov 21 – paid 284.16 interest
2nd December 21 – 27th December 21 – paid £66 interest on this one.
At the time of these loans I also had safetynet credit, which i claimed and won against a few years back. This shows on my bank statements and at the time would have also been on my credit file but has now been removed. I also had a 4k loan with 118118 money, I can’t do anything about this one, they rejected it over a year ago and didn’t go to the FOS as I thought I mustn’t have a case.
Neyber – yes i have claimed against them awaiting a reply. I’ve paid 8k of this back but still is a high balance left for interest.
Catalogues and credit cards all raised the limits i have sent in a claim to them. The catalogue’s were with JD Williams’ (simply be and fashion world), they have only partially upheld theirs so I have sent it to the FOS. The credit cards, Zopa has rejected it also, i have also sent this to the FOS.
Thanks for your help
Sara (Debt Camel) says
It is unusual to win a complaint about a first payday loan. Then the second loan was smaller and there was a gap of 2 months between paying off the 1st and taking the second. Your case against the third loan is strongest but you only paid £66 in interest on it.
You know these loans were unaffordable so you could go to FOS, but it isn’t clear you are likely to get much back,
Sarah says
Thank you, they’ve upheld the second one only but the only thing they have offered is to remove this loan only from my credit file.
Sara (Debt Camel) says
ah I read your first comment as meaning that they had offered to remove the third loan from your record.
Could you copy and paste in here the bit of their decision that refers to the second loan?
Jason says
Hi Sara,
So I had an affordability complaint with Likely Loans upheld earlier this year. After all refund etc I was left with £1,093 to pay them back. Negative reporting to credit agencies suppressed and to be able to pay back at an ‘affordable rate’. In May they told me that ‘when I was in a position to do so’ I could contact them to set up repayment plan (as I was struggling for money at the time). I am now in a better position and was going to contact them at the beginning of November. I have just had an email from them last night with a ‘sum of arrears’ and the total is now £1,435 that I owe them? I’ve tried contacting them but as it’s a Sunday they cannot help me but its really playing on my mind.
I thought they couldn’t add on any interest or sums if my affordability complaint was upheld? Plus they said I’ve totalled up since March (when affordability complaint was upheld) an extra £415 which I now owe but £1093 plus £415 doesn’t equal £1435? So I’m very confused
Sara (Debt Camel) says
Go back and say you are happy to make an affordable payment arrangement but they should not be adding interest.
Beth McLeish says
Has anyone had a letter from Lending Stream offering redress? They only mention one random loan from 2018, but I had about 6 after that one and won at FOS on the final one through a claims company (didn’t know I could do it myself back then!) is it worth counteracting any offer to include the other loans? Thanks in advance for any help!
Sara (Debt Camel) says
I hadn’t heard they are making some offers.
Did the FOS claim cover all the debts and they only upheld the last one?
Beth McLeish says
I think I only claimed for the last one, the claims company was dreadful and I did all the chasing & follow up myself! Can’t see original emails just the replies to the claims company, so can’t remember exact details.
Sara (Debt Camel) says
So 6 loans over several years isnt a lot, but you can try going back to LS and asking for other loans to be included.
Ryan says
Hi Sarah,
I’m going through an affordability complaint process with Fernovo regarding two loans I had with them (£300 each). The first was paid early as I had a financial windfall from work, the second taken out two months later has resulted in a CCJ which is now settled. They are rejecting complaint due to what they believe to be suitable affordability checks having taken place (credit check with TransUnion, I&E). Their website states they check multiple credit ref agencies but only used TransUnion. The report from TransUnion doesn’t show other multiple loans, credit cards etc, I have provided bank statements to show these but still the complaint is being rejected with an offer of a £95 refund. Should I pursue with them and potentially FOS? Do I have any chance with this one? Do I have any chance of CCJ being set aside?
Sara (Debt Camel) says
It can be hard to win a payday loan complaint about 2 300 loans. What was the gap between paying off the first one and taking the second one?
What are the rest of your finances like at the moment?
Ryan says
Gap was just under two months from paying off first one and taking out second one.
Finances are not good, payment plans for lots at moment due to gambling issue so have lodged lots of complaints recently.
Sara (Debt Camel) says
you normally have to have borrowed a lot more or have had several consecutive loans to win payday complaints. How realistic are the other ones? I think you should talk to a debt adviser about your options – with a recent CCJ it maybe that a DRO or bankruptcy is the best way to get a clean start.
Ryan says
Other complaints are realistic I think…
Aqua – started with a limit of £900, ended up with £4900 due to multiple increases offered by them
Lending Stream – 7 consecutive loans totalling just over £2k
Capital One – 2 x cards with them at same time
118118 – three consecutive loans after being offered new ones each time and a credit card all at same time
There are others as well for smaller amounts.
In terms of the debt, I’m starting to get on top of it now, it’s just the CCJs (x3) that are a big negative, one of them from the Aqua card
Richard says
Hi Sara. I had a claim in with dot dot loans. They have just gone into administration. The FOS sided with me. But they disagreed. Now we know why. So it could be dragged out when it went to an ombudsman. I had £900 still owning that got sent to lantern for recovery. I was paying bits of this each month. Knowing that eventually I’d get it back anyway. But now they gone in administration what I get back will be peanuts.
I don’t really want to pay anymore off it with lantern as I know administrators will write it off. So not going to be beneficial for me to pay it really.
Is this the best route I can take?
Thanks in advance
Sara (Debt Camel) says
Had you told Lantern you had a FOS case?
Richard says
Not at first. But I have today.
Sara (Debt Camel) says
it is unclear at the moment what the administrators will do with loans that have been sold to debt collectors. See https://debtcamel.co.uk/morses-club-administration-scheme-fails/
How much are you paying Lantern a month at the moment? Have you already repaid Dot Dot orand Lantern the amount that you borrowed? Did you have previous Dot dot loans?
Richard says
Yeah had previous loans and yes definitely paid them what owed. This is definitely interest. Was paying lantern £50 a month.
Will we know in a few weeks what the administrators plan to do about lantern etc. am I best asking lantern to put account on hold for now. And see what happens. Or should I continue paying what I am paying to them?
Thanks in advance
Sara (Debt Camel) says
I can’t promise the timescale, but I would hope that we do know in few weeks. Yes you can ask Lantern to put the account on hold.
Kelly says
Hello Sara,
I don’t suppose you know anything about what is going on with Piggy Bank redress? They went into administration at the end of 2019. They aren’t answering the telephone or responding to any messages / emails.
Is there a chance that maybe they aren’t paying refunds?
Cheers
Kelly
Sara (Debt Camel) says
The last administrators progress report in July (https://find-and-update.company-information.service.gov.uk/company/07952979/filing-history) makes it sounds as though there may not be enough money to distribute.