Have you had a credit card, store card or catalogue where your credit limit was too high? So high that the monthly repayments were hard to manage and you got into more debt?
Many people were originally given an OK limit, but the lender kept increasing it.
You may have a good affordability complaint that the lender was irresponsible in allowing you to borrow so much. This applies even if you made every payment on time, as you may have borrowed more elsewhere.
This article explains how to ask for a refund of the interest you have paid.
Contents
What is “affordable”?
The regulator’s rules
Even if you made every payment on time, the debt may still have been unaffordable.
The following is my summary of the regulator’s rules:
- a lender must check if credit is affordable when you apply for it. For a very low limit, not many checks are needed;
- a lender should make checks before increasing a credit limit;
- credit isn’t affordable if paying it leaves you short of money for your bills, normal expenses, and your other debts;
- if you have to borrow more most months, this would not be affordable;
- you must be able to repay the limit set within a reasonable period. Paying the minimum amount is OK for a while, but not for a long time.
Good reasons to complain
If the lender could see any of these on your credit record, they should probably have declined your original application:
- a level of borrowing that looks too high in relation to your income; or
- you had a different credit card with the same lender where you were only making minimum payments; or
- other credit cards where you were near your limit and persistent overdraft usage. Here is an Ombudsman decision saying Zopa should not have given quite a low initial limit in this situation; or
- recent credit record problems: defaults, missed payments, or arrangements to pay, mortgage arrears; or
- recent payday loans or a lot of recent credit applications.
Your credit limit should not have been increased unless you could afford it. In addition to the points above, any of the following should have also warned the lender you were already in difficulty:
- making minimum payments for a long while;
- making a minimum repayment but then using the card to pay for food or petrol so the balance never drops;
- using most of your limit for a long period;
- significant gambling the lender was aware of;
- recent missed payments or an arrangement to pay on your credit record;
- your overall level of debt on your credit record has increased a lot.
NB many cases are won when someone has never missed a payment.
You don’t need to know the dates and amounts of any limit increases before you start your complaint – my template asks for these.
0% balance transfers
Here the lender should check that you would be able to repay the whole limit within a manageable length of time (say 5 or 6 years) taking into account the interest that will be charged when the 0% term ends.
So if you were ok during the 0% term but then you couldn’t afford the payments when interest started being added, you can complain. Ask for any interest to be refunded and to be able to repay the rest with no interest.
Do I need to know the limit and date details?
No. My template below asks for these. The lender already knows the details it doesn’t help your complaint by listing them. So don’t delay trying to find them out first.
How to complain
The email address to use
The best way to complain is by email.
I have a list of EMAIL ADDRESSES to use here:
Credit card and catalogue email addresses
Start with this template
I’ve invented this example so you can see how a complaint could read.
Change/delete the bits in italics to tell your story. Miss out dates if you don’t know them, this isn’t a problem
I want to complain about irresponsible lending for my Barclaycard account number 987654/444.
My date of birth is dd/mm/yy. The email address I used for this account was myaddress@whatever.com.
Put this in if you think the lender may have an old address for you
I have moved and my home address is now xxxxxxxxxxxxxxxxxxx. Please do not send any letters to any older addresses on your system.
Then say they should never have given you the account:
You should never have allowed me to open an account with such a large credit limit.
On my income with my regular household expenses and other debts I could not manage to repay that amount in a reasonable time.
[if you had already missed payments] When I applied, you should have checked my credit record and would have seen I had recent missed payments to a credit card and a default only five months before on a loan.
[If this started as a 0% transfer: You should have seen that I would not be able to clear the balance in a manageable length of time, and that after the 0% period ended, I would struggle to pay the higher minimums once interest was being added.]
AND/OR say that they should not have increased your credit limit:
You should never have increased my credit limit [in 2022] At that time I had only made minimum payments on this credit card for a long while and/or I was using a very high level of my credit limit.
If you had properly checked my credit record before increasing my limit, you would have seen that in the two years since my account with you was opened, I had got additional late payment markers and defaults and/or taken out a lot of other credit. This should have warned you I was struggling with my finances and it was not responsible to lend more. By increasing my credit limit you made my financial position worse. Instead you should have offered me forbearance by freezing the interest on the card.
I do not know the exact months of these credit limit increases. In your reply to this complaint, please tell me the dates and amounts of all limit increases, even if these happened over 6 years ago.
If the lender should have known you had problems with your account, mention these
You should also have realised that I was having difficulty because:
of the late payment charges you added to my account
I had missed two payments to you the year before in 2017
I had already asked you on the phone if it was possible to stop adding interest for a while.
End with asking for a refund:
I would like you to refund me all the interest I paid and any late payment charges from the point the account was opened
OR
I would like you to refund me all the interest I paid and any late payment charges after you increased my credit limit in 2021.
OR
I would like you to refund all the interest I have paid since the 0% period ended and allow me to clear the balance without adding interest.
I would also like any late payment and default markers to be removed from credit records after this point.
Think about these points before complaining
Timing
These complaints can be made if your account is still open, or if it is closed and settled, or if it is with a debt collector (NB the complaint goes to the original lender, not the debt collector.)
If you have had an IVA or bankruptcy after these problems, or if you are still in a DRO, then ask in the comments below, as this can be complicated.
Old accounts
The Financial Ombudsman (FOS) can only go back to April 2007, when the law changed to allow these complaints.
Many lenders reject complaints about something that was more than six years ago and say the ombudsman won’t look at them. FOS will often look at these “old” accounts if they have still been open within the last six years, but you may have problems producing bank statements or other evidence from over 6 years to show that a limit was unaffordable.
If your account was opened in 2015 but the lender increased your limit in the last six years, then those limit increases can definitely be looked at. And you can always get bank statements going back six years even from closed bank accounts.
A alternative for old defaulted accounts?
If your account was opened a long while ago, you defaulted and still owe a balance, perhaps in a DMP, think about asking the debt collector to produce the Consumer Credit Act agreement for the account.
If the current creditor can’t produce a proper copy of the agreement, the debt cannot be enforced in court and you can simply stop paying anything to it. This applies to all credit cards, store cards and catalogues.
It may be that the balance on the account is larger than any refund you might get. In which case if the CCA agreement cannot be produced, you would be better off.
Is a refund what you really need?
This depends how large your current financial problems are.
Complaining about newish debt will often only get the interest removed – you still have to repay what you borrowed. Don’t spend months arguing with lenders and going to the ombudsman if you will still be in a mess even if you win.
So phone National Debtline on 0808 808 4000, tell them you are thinking about affordability complaints but you would like to know what your other debt options are.
Poor reasons to complain
You can’t complain just because the interest rate was high or because you have paid them a fortune over the years.
You won’t win an affordability complaint if something unexpected went wrong later in your life. If you had been managing a credit card fine for years but then you lost your job or separated from your partner, this isn’t the lender’s fault. Here you may still need help to get interest stopped on the cards – talk to StepChange or National Debtline.
Don’t be put off by a rejection or a poor offer
Lenders often reject good cases
If a lender rejects your complaint or offers a low “goodwill” gesture, don’t be fobbed off – they want you to give up.
Here are some bad or irrelevant comments lenders sometimes make when rejecting a complaint:
- you made the payments to them on time – that doesn’t mean you could manage a higher limit;
- the account was opened over 6 years ago – if it was still open in the last 6 years the Ombudsman may look at it;
- you accepted the limit increase – that doesn’t make a difference, it increase should not have been offered it if it was unaffordable.
You know if this card or catalogue has caused you difficulty – it’s easy to send a case to the independent ombudsman. Don’t delay doing this!
How to send a case to FOS
Send FOS a complaint using their online form. You can use bits of what you put in your complaint to the lender. If the lender has rejected your complaint or given a poor offer, say why you think this wrong.
The FOS form at the end asks you to add supporting documents. Don’t bother to send A copy of your credit or finance agreement – the lender will supply that if FOS asks for it.
Send FOS a copy of your credit report, they always want to see it. If you have any old credit reports, send the oldest one you have, otherwise send the current one. You can download a statutory TransUnion report for free.
Also get your bank statements if they will support your complaint and send those to FOS too. Do not wait to be asked by FOS for these. Ideally you want them 3 months before and three months after the account was opened and before /after any limit increase
FOS is a friendly service but not fast. Just use normal English, not legal terms. Using a claims company or a solicitor doesn’t help or speed this up.
Ask questions below!
There are hundreds of comments from readers who are using this template. It’s a good place to see how these complaints often go and to ask any questions.
FAQs about Affordability claims
Can you get an overdraft refund?
Could a Debt Relief Order help you?
AQ says
Hello,
I sent an irresponsible lending complaint to barclaycard to wandim.execcomplaints@barclays.com and it didn’t bounce back, does it mean it has gone through , I know you have written that if doesn’t it means it went through. Just wanted to make sure? Complaint is about May 2016 for £6400 limit but had nearly 30k debt already with car finance agreement started in February 2016 and nearly £10k gambling transactions in one month , most probably will need to refer to FOS let’s see 🤞
Sara (Debt Camel) says
Do you have your bank statements for that time?
AQ says
This email address worked and have received complaint reference. Yes I have sent them all the bank statements from Lloyds which had all the credit card payments and gambling transactions. Also sent them Barclays account statement as well to make a point that only a couple of hundred went into Barclays per month so they had no clue about my finances. Thank you
AQ says
just realised I made first complaint to 118118 money and it was a loan. It went to FOS and I won it. It was in July 2022 and that’s more than 3 years ago and FOS knows that I did know about irresponsible lending complaints. Am I out of even 3 year rule ?
but then again I didn’t know about credit card complaints till late 2023 early 2024
Olivia says
Thankyou so much for your template, I have just sent it off to a couple of my creditors and hoping for a successful reply. I have a query about 2 credit card accounts I hold with Lloyds, I have held my current account with Lloyds for 10+years and not keen to change, I still have debt I’m paying off on the 2 cards, will the complaint affect my normal banking account with them?
My second query; I’m already on track to pay off one of the cards this year and they have said when the balance hits 0 they will close my account due to the persistent debt, are the complaints sent off likely to trigger this kind of response from other lenders and if so wont the sudden decrease of available credit of my overall credit affect my score?
Sara (Debt Camel) says
Complaining to lloyds about credit cards will not affect your bank account.
And it won’t affect your credit record if you carry on making the normal monthly payments as they go through.
“Persistent debt” letters and subsequent decisions are triggered by rules set by the regulator. Lender X will only send these letters when the rules says so, and at that point they have no option to not send them… So lender X won’t send these letters because Lloyds has sent one. Nor if you complaint to Lloyds – lender X will not know you have done that. Nor if you complain to lender X itself.
Nara says
Hi Sara,
Thank you so much for your IL template. I raised my complaint with the Financial Ombudsman Service in February and it was upheld last month. NewDay agreed to the findings and were due to contact me by tomorrow with my refund. Based on the Ombudsman’s instructions and my payments since 2022, the estimate is around £15,000.
Instead, NewDay have delayed for a month and even passed my details to a debt collection agency while the case is still active. Today the Ombudsman told me NewDay claim they have completed the rework, but the figures they have provided are completely incorrect. They are saying I still owe over £6,000 and will only receive a refund of £3,055, despite the fact I have paid them over £17,000 since January 2022. Their calculation does not match the Ombudsman’s instructions at all.
I have gone back to the Ombudsman to request a full breakdown and escalation. If you have any advice for situations where lenders behave like this or appear to be deliberately miscalculating refunds, I would really appreciate it.
Thank you again for your help.
Sara (Debt Camel) says
the refund will only be of interest and charges, NOT the full amount of the payments you have made, as much of them will have been repaying what you borrowed.
How large are your other debts?
Nara says
Hi Sara,
Thank you for your reply. In my case the Ombudsman has capped my balance at £2,450 from January 2022 and ordered NewDay to remove all interest and charges above that, then apply all my payments and refund any overpayments with 8 percent interest. I have no other debts, just this one account which had a £7,000 limit and a £6,000 balance before the decision.
Daisy says
Hi Sara
After reading a few of the comments and your information. I think this would really help me.
Wondering if this is something I should do?
I currently have debt of £11,700 spread amongst various cards the most being to Natwest at £8,200 on two different balance transfer cards.
I had already had one balance transfer card from Natwest that I got back in 2023 which was at an okay time but since then I have had more credit cards and my balances on debt haven’t dropped any lower.
Back in June I applied for another balance transfer card for £6000 with Natwest and I believe that due to my history of multiple other cards and being unable to pay off the other Natwest card fully and only making minimum payments on it they shouldn’t have approved me for this card.
Would this be an appropriate complaint? I am also going to call them tommorow for a financial health check as my mental health has worsened due to all of this debt.
Sara (Debt Camel) says
are you currently paying interest on these natwest cards?
Daisy says
Yes! the one that I got back in 2023 I have paid over £1200 in interest and the balance is still around £2900 despite the limit being £3500!
The second card that I took out in June is currently interest free and I can’t remember when it ends!
Daisy says
Yes! I am paying interest with monthly payments coming up to £150!!! the newest card is currently interest free.
Sara (Debt Camel) says
ok so make a complaint about all of them
Jules says
Hi Sara,
Barclaycard suspended my credit card 2 years ago due to persistent debt. I have been paying the minimum payments since but they are still charging me interest each month on the balance making it hard to pay off. The day in which they called me to suspend it, they stated they would reduce the interest rate but didn’t. they gave another option to remove the interest rate entirely and that this would impact my credit file I told them to choose the option that doesn’t impact my credit file.
I got busy with life and didn’t check and struggle with various mental health issues including adhd. when checking the statements I saw that they have been charging interest ever since. I Called them and said that there should’ve been a reduction in rate as it’s charging me 22% but they said there was no record of this. I asked them to check the phone call and they said they can’t access it or they can’t see any notes to suggest that I requested the reduction in rate. I quite clearly remember them givign me the 2 options and choosing the one in which would not impact my file and pay off the card.
How can I get them to refund the interest?
the balance left to pay is £700 .
Sara (Debt Camel) says
That may be hard if there is no evidence.
Have you looked at making an affordability complaint? Win that and some or all of the interest may be refunded. See https://debtcamel.co.uk/refunds-catalogue-credit-card/
Jules says
Ok thanks will try that.
Can you do affordability complaints on credit cards that have been defaulted and bought by a debt collector?
MBNA, AMEX and Halifax credit card
Sara (Debt Camel) says
Yes, the complaint still goes to the lender, not the new creditor
But how long ago were the defaults?
Jules says
They were 2 years ago. I’ve paid some small payments to them already
Sara (Debt Camel) says
That’s fine, if they defaulted a long time ago it would be hard to in an affordability complaint, but only 2 years shouldnt be a problem. get the complaints in soon, don’t delay
Alice says
Hi Sara, I used your template to send an email to Lloyds Bank to complain about an unaffordable credit card approved in October 2024 with a large limit when I already had an overdraft, 4 other credit cards and a personal loan. They denied they did anything wrong so I took it to the Ombudsman. While they were investigating, Lloyds admitted responsibility and have agreed to refund interest, the balance transfer fee, allowed me to pay off the balance interest free, and they will remove all negative information once the balance is paid off.
Thank you for your website and your guidance.
Alice
Sara (Debt Camel) says
That is a good result!