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.
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 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 your Provident loan on time, it could still have been unaffordable.
If the lender should have realised the loan was unaffordable they shouldn’t have given it to you – that was irresponsible lending and you should get a refund back of the interest you paid.
It is difficult 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 complain
For the last 18 months, 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.
That article has template letters for complaining and it describes what you need to do and when to take your case to the Financial Ombudsman. And at the bottom there are thousands of comments from people making these claims, so you can see how it works in practice.
Here are some points that often crop up with doorstep lending. If any of the following happened to you, add a similar sentence to the standard letter in that link:
- “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 told the collector I had lost my job and she offered me a new loan to tide me over”;
- “When I asked my collector if I could pay over a longer period, he said I couldn’t unless I took a new loan”;
- “I have borrowed from you continuously for four years. Every time I cleared some debt, I was offered top ups”;
- “I missed several payments but you kept lending me more”;
- “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.”
Those are all bad but pretty common. There are some horror stories of bad lending and collection in this recent Citizens Advice report: Debt on your doorstep.
Contact details for the main doorstep lenders
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. 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.
- Provident Use their online form: complaints to Provident and copy your complaints letter into the “message you want to send us” box. (Same for Greenwoods).
- Morses Club You have to write to them, see complaints to Morses. (Same for Shopacheck).
- Loans at home email with COMPLAINT in the title to email@example.com.
- Mutual email to firstname.lastname@example.org.
How good is your complaint?
The more loans you had, the better your case. Borrowing for prolonged 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.
If you think you have a good case, don’t be put off if the lender rejects it. People are winning these cases at the Financial Ombudsman. The payday loan refund link above describes how to send your complaint to the Ombudsman, what details to include etc.
Don’t be worried because your bank statements show a lot of gambling. Read Gambling and payday loans complaints for examples of how the Financial Ombudsman handles this sort of case -it is hardly ever a problem.
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.
What will the Ombudsman say?
You can take cases with doorstep loans more than 6 years old to the Ombudsman. The lenders may say they haven’t kept the records of the credit checks for these older loans … but they don’t seem to be very good at producing the records for the more recent loans either!
You probably won’t get a refund back of all the interest you paid. But ask for it all and let the Ombudsman make the decision about where your loans became unaffordable. You don’t have to calculate and ask for an amount.
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 is also worth emphasising if you repaid some loans early because you borrowed more that month from the same doorstep lender. To the adjudicator this can look at first sight as though the lender was fine to carry on handing out loans as you weren’t in trouble as you had repaid loans early. It’s important to try to show the links between your loans. So:
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.
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!
If you are still repaying a doorstep loan, you can still complain. If the repayments are too high, talk to StepChange and they can see if a debt management plan would help. You can still complain if you are in debt management.
Comments or questions?
I suggest you add a comment on the payday loan refunds page as they are read by so many people.