If you had doorstep loans from lender such as Provident, you may be able to get a refund of the interest you paid if the lender should have realised the loan was unaffordable for you.
Doorstep lending – also called home credit – is where a collector comes to your house to collect the repayments.
Doorstep loans are used by over 1.3 million people in Britain. The four largest lenders are Provident (includes Greenwoods), Morses Club (includes Shopacheck), Mutual and Loans At Home. Provident is much the largest, but everything in this article also applies to the other lenders.
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What is an “unaffordable” doorstep loan?
The regulator says that a loan is unaffordable if you couldn’t make the repayments without borrowing again. This could be borrowing from the same lender, from someone else, getting deeper into your overdraft or by not paying a bill such as a utility bill.
So even if you always paid loans on time, they could still have been unaffordable. Especially if you had several Provident loans at the same time or often had to refinance/top-up a loan.
Often the first few loans may have been just about affordable, but Provident should have realised their loans were making your life more difficult when you kept getting more loans. If you were struggling, your agent should have suggested that you could repay the current one a lot more slowly with no extra interest being added, not offered another larger loan. That was irresponsible lending and you should get a refund back of the interest you paid.
You are very unlikely to get a refund for only one loan. But if you borrowed several times and especially if you took out a new loan when you were having problems paying an existing one, then complain.
How to ask for a refund from Provident or other doorstep lender
For the last few years, lots of people have been getting large refunds from payday loans, see How to ask for a payday loan refund. The good news is the process is exactly the same for doorstep loans – the regulator’s definition of affordability is the same for all sorts of lending.
And now people are having success with complaints about doorstep loans – see the comments at the bottom of this article!
The template letter here for doorstep loans is very similar to the payday loans, but it has some extra points that may be important for your provident claim.
Template letter to ask Provident for a refund
As I do not have all the details of my loans, I want you to send me a list of them, 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 if you already know all the details for all of your loans.]
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.
[If any of the following happened to you, add a couple of sentences describing this. If the problems didn’t happen for all of your loans, add the words OFTEN or SOMETIMES. Delete any that didn’t happen to you.]
- I have borrowed from you continuously for [say how many years]. Every time I repaid a few payments my collector encouraged me to take a top up and refinance it. My collector never explained I would have paid less interest if I just took a new loan and carried on repaying the old one.
- I missed several payments and the collector knew I was in difficulty as I had lost my job/had my hours cut/benefits reduced but I was just offered a new loan. I was never told that I could have a repayment plan for my existing loan instead.
- When I asked my collector if I could pay over a longer period, he/she said I couldn’t unless I took a new loan.
- For the first loan my collector looked at my payslip but after that he never checked and never asked if I was getting the same money – I wasn’t.
- My collector said I needed to change some things on my application otherwise it wouldn’t be approved.
- My collector filled out the application and gave it to me to sign, I didn’t have time to read it.
I didn’t know that the lender was supposed to check that I could repay the loan without having to borrow more. I only found out in March 2019 when I saw a newspaper article in the Sun/an advert on Facebook for payday loan refunds/my sister/friend told me about these complaints/whatever. [Only put this in some of your loans are more than 6 years old. Put this into your own words so it covers what happened to you, don’t just copy those words.]
Include your customer reference number if you had one. Explain if you have moved address or changed your email so they can locate your account.
Contact details for doorstep lenders
- Provident & Greenwoods Use their online form: complaints to Provident and copy your complaints letter into the “message you want to send us” box.
- Morses Club & Shopacheck You have to write to them, see complaints to Morses.
- Loans at home email with COMPLAINT in the title to customerservice@sd-taylor.co.uk.
- Mutual email to complaints@mutual.uk.com.
- Short Term Finance (Birmingham) Use their online form and copy your complaints letter into there: complaints to Short-Term Finance.
- Naylors Finance email with COMPLAINT in the title to admin@jrnaylors.com.
- Skyline Direct complaints@skylinedirect.com
Keep a copy of online complaints or letter sent – if you email it to yourself it’s easy to pass on to the Ombudsman if needed.
How strong is your complaint?
It can be hard to win a complaint for just a couple of small loans.
Two useful guidelines are:
- The more loans you had, the better your case. Borrowing for long periods by taking out new loans or refinancing existing ones shows you were dependent on the loans.
- The larger the loans became, the better your complaint is. The first few loans may have been affordable but if they kept going up, that is a sign of increasing trouble.
You should get a response in 8 weeks
This letter or email starts off the affordability complaint. The clock is now running and the lender has to reply to your complaint within 8 weeks from when you send the email, not when they acknowledge it.
Provident is being very slow about replying to complaints and they often don’t make a good offer. They may ask for two more weeks several times… I suggest you send the case to the Ombudsman straight away after 8 weeks.
If the lender rejects your complaint or makes a poor offer
If you think you have a good case, don’t be put off if the lender rejects it. People are winning A LOT of these cases at the Financial Ombudsman.
It’s normal to not get the first few loans refunded. If Provident has offered you a refund of loans 5-12 that is probably a good offer. But if they have offered a refund on just loans 10-12 it probably isn’t and you could get a lot more by going to FOS.
If you are offered a small amount, don’t worry you will lose this offer if you go to the Ombudsman. We have never seen this happen.
If the lender says the loans are more than 6 years old so you can’t complain about them, ignore this and send your case to the Ombudsman who is looking at older loans (but not loans before April 2007. you can’t get a refund on them).
Sending a complaint to the Ombudsman
The easiest way to send a complaint is to use their online application form because that asks all the questions they need to know the answer to (most of these are easy, such as would like to be contacted by letter, email or phone?)
You probably won’t get a refund back of all the interest you paid – most refunds are for recent loans.
But ask for a refund on all loans and let the Ombudsman make the decision about where your loans became unaffordable. You don’t have to calculate anything or ask for an specific amount.
What should you say to FOS?
You can just copy the complaint you sent to the lender. But here are some more things you may want to add:
It’s worth emphasising if you had a poor credit record, especially if it got worse as you carried on borrowing from the doorstep lender.
It can help to show the links between your loans if there were a lot of them. Something like this can explain your case:
I took loan 2 out as soon as I repaid loan 1 and it was for a larger amount. I then took out loan 3 whilst loan 2 was still going. After a few months I couldn’t afford the payments so my collector suggested I took out a loan to repay off the loans 2 and 3 and spread the repayments over longer. So loans 2 and 3 were repaid early only because I borrowed more. etc etc.
It is also worth emphasising if you repaid some loans early because you borrowed more that month from the same doorstep lender. This is sometimes called “refinancing” your loan.
In this case you may have paid more in interest than you would have if you had just been given an extra loan because of the way the “early settlement calculation” was done. If this wasn’t explained to you by your agent (and I bet it wasn’t!) then you paid more interest than you should have.
It is also worth pointing out to the Ombudsman if it was always your agent suggesting you borrow more, perhaps because it was getting near to Christmas, or in August when you might need more money for new school uniforms, or because you had paid off a lot of a previous loan.
A lender such as Provident should only have offered you a loan if you had asked them in writing for it. The collector shouldn’t have sat in your home and offered new loans. So if this happened to you, mention it in your complaint to the Ombudsman.
Send your bank statements and credit report
Send your bank statements with your complaint. If you haven’t got them all, send ones you do have and set about asking your bank for the rest, then send those. You are more likely to win a complaint if you send them, especially if you only had a few loans.
If you have borrowed for many years and the pile of statements would be HUGE, it’s still a good idea to get them all now, but you could then wait and see that the ombudsman asks for.
Don’t be worried because your bank statements show a lot of gambling. Here is one case Ombudsman decision about a Provident case involving gambling which shows that FOS just accepts you have a gambling problem, you can still win these complaints.
Also get a copy of your free Credit Karma report and send it to the Ombudsman with your complaint. Don’t worry you can’t get an old credit report – the Ombudsman knows this isn’t possible.
What about your current loan?
If you are still repaying a doorstep loan, you can still complain. If you tell the doorstep lender you want a payment arrangement, they will allow you to pay less each week over a longer period without adding any more interest.
But if you have other problem debts as well, talk to StepChange and they can see if a debt management plan would help. You can still complain if you are in debt management.
Need some help?
Your local Citizens Advice can help with writing these complaints, that will be free.
You don’t need a lawyer or a claims company. They take a LOT of your refund and you can make a better claim on your own than they can. A good claim involves telling your own story, you know it and a claims company doesn’t!
Comments or questions?
Hundreds of readers have posted comments below about how their Provident complaints are going and the successes they have had. If you have a question, ask it here!
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Neil.iveson@provident.co.uk
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