If you are in debt management, you may be worried about making an affordability complaint, would you ever get any money from this? Luckily there is an extremely simple answer: Yes.
And it’s the same if you have repaid all the debts and your DMP has finished.
This article looks at how to make the claim and answers some of the common questions people have.
How to make complaints asking for refunds
The important point if you are in a Debt Management Plan is that you must not use a claims firm.
Some refunds may not come as a cheque to you, instead they may be deducted from the money you owe. So if you still owe £1,000 to the original lender or a debt collector for a payday loan, this may be reduced to say £300 if you win your complaint and interest is removed on the defaulted loan and possibly refunded on earlier loans from that lender.
Good news? Yes, your DMP will end sooner. That’s why it’s worth making these complaints.
BUT if you have used a claims management firm, you now owe them their high fees on the refund, so you have a new debt for several hundred pounds that you didn’t have before. and you didn’t get a cash refund to pay this from.
I have seen people being taken to court for a CCJ for these claims management fees – when they had never had a CCJ before at all :(
So you need to claim the refunds yourself. Luckily this isn’t hard and you can actually do a better job of it than a claims company can.
An easy two stage complaint process
Stage one – complain to the original lender
Here arearticle that explain in detail how to complain, with free template letters you can use to kick off your complaint. And if you look at the comments, you can see how other people just like you are getting on.
How to make an affordabilty complaint about:
- payday loans
- large “bad credit” loans
- guarantor loans when you are the borrower – be careful that you still have to carry on making payments during the complaint if you don’t want this to affect your guarantor
- guarantor loans when you are the guarantor
- Provident and other doorstep loans
- Brighthouse and other “pay weekly” shops
- catalogues, credit cards and overdrafts where your credit limit was increased to an unmanageable level
- car finance – be careful as you may have better options than an affordabilty complaint.
Stage 2 – send the complaint to the Financial Ombudsman if it is rejected!
This is easy, you can just do it online using the Ombudsman’s page that prompts you for all the details such as your name, address, who you are complaining against, how you would like the ombudsman to contact you etc.
If you aren’t sure if your case is strong enough to do this, ask a question in the comments below the page with the template letter you used.
“My debt has been sold on – who do I claim against?”
You claim a refund from the original lender, not the debt collector that has bought the debt. This is actually a good situation for you, as the original lender is more likely to send you a cheque rather than offset it against the debt.
If you get a cheque from the original lender, that won’t change the debt you still owe to the debt collector in your DMP. But you can use the money to make a Full & Final offer to one or more of your debts in your DMP – it doesn’t have to be used to clear the debt the refund related to. This way getting a £800 refund could let you clear £1,500 or more of your remaining debt!
All you are risking by making an affordabilty complaint when you are in debt management is the time to send a couple of emails. And the gains could be potentially large. It’s well worth trying!
This article was originally about PPI, but you can no longer make any PPI claims.