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Here’s how to complain about a personal loan if you’ve been abused by a lender

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Payday loans can look very appealing if you’re struggling to get credit from a traditional lender, but they can cost you a fortune in interest and fees – and could leave you trapped in a downward spiral of debt.

This form of high-cost short-term credit has been criticized for several years and the latest figures show that consumers are increasingly showing their dissatisfaction.

Figures from the Financial Ombudsman Service show that the organization received 7,485 payday loan complaints in the 12 months from April 2015 to March 2016.

However, in the six months from April to September 2016, the FOS has already received 7,375 complaints.



“The sharp increase in the number of complaints shows that payday lenders continue to fall short when it comes to lending responsibly and treating their customers fairly,” says Tashema Jackson of uSwitch.com.

“Despite regulatory controls put in place by the Financial Conduct Authority (FCA), many short-term lenders still worry their clients,” she adds.

Crackdown on payday lenders




The FCA has cracked down on the lending practices of short-term lenders in recent years in an effort to protect borrowers.

In 2014, strict regulations were implemented, which included rules on interest and other charges, as well as rules on when a loan is deemed “unaffordable”.

As part of the crackdown, some lenders were required to pay heavy fines – as well as compensation to customers.



But while lenders are now forced to make sure clients can afford loans – and treat them fairly if they run into difficulties – problems persist and complaints continue to escalate.

A new report from Stepchange Debt Charity reveals that almost two years after the introduction of strict controls, the payday loan market continues to show “signs of irresponsible lending and bad treatment of people in financial difficulty.”

“Regulation can make a significant difference in shattered markets and FCA’s action over the past few years has corrected the worst payday lending excesses – but there is clearly more work to be done,” said Mike O ‘Connor from Stepchange.

“Bad credit practices and the mistreatment of people in financial difficulty have serious consequences. They trap people in a cycle of repeated borrowing and, as their balances continue to increase, the stress and anxiety that accompany a serious debt problem also increases, ”adds O’Connor.

Consumers are more aware of their rights








More and more people are realizing the damage payday loans can do – and what to do if it all goes wrong
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On a brighter note, the latest figures indicate that more people are now aware of their right to complain to the ombudsman if they feel they are being treated unfairly by a payday lender.

“More and more the spotlight is on what is sometimes a nasty industry. People are now more aware of their rights and where they can complain, ”said Guy Anker of Moneysavingexpert.com.

USwitch’s Jackson added: “This is reassuring because it is usually the most vulnerable who use short-term lenders, having been excluded from traditional lending avenues.”

When do you have the right to make a complaint?

Here are two things you should consider when trying to get repayment for any part of a payday loan:

“If you think you’ve been mistreated or are having more and more problems paying off your payday loans – such as taking out larger payday loans or having trouble paying yourself a payday loan – you have the right to deposit. a formal complaint, ”said James Walker of the Consumer Rights website, Resolver.fr .

Anker added: “If you’ve received payments unexpectedly into your bank account, don’t think the lender has properly verified that you could afford to pay off the loan – or that they’ve harassed you to pay off your debt – you have reasons to take action. . “

How to proceed to file a complaint








Start by writing a complaint letter to the lender outlining your concerns.
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If you want to file a complaint, you must first file a formal complaint with the lender. You should do it in writing.

You can also do this through an online complaints tool, such as Resolver.fr . For more information Click here .

The lender then has eight weeks to respond.

If the company does not respond or offer compensation within this time frame, you can report the case to the Financial Ombudsman Service (FOS).

“If the payday lender doesn’t give you a satisfactory answer, don’t give up – go to the ombudsman,” Anker says. “It’s completely free.”

The FOS will assess your case and make an independent decision on your issue.

You can call the FOS at (0300) 1239 123, or visit their help page for payday loans .

“If you have a complaint about a payday loan, the FOS is probably the best option because it has the legal authority to resolve disputes between businesses and consumers,” says Anker. “He can rule, order compensation and even pay for your extra time.”

What compensation is available?








Crisis: Britain is in payday loan crisis, prominent charity says
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The remedy available will depend on the nature of your complaint.

“It can range from more time to pay off your loan to compensation if you’ve been treated unfairly. The ombudsman will review all of the details of your complaint and make a decision based on your personal situation, ”Jackson said.

Resolver.fr says he has seen consumers receive up to £ 9,000 for a poorly sold payday loan.

Think carefully before choosing a personal loan

Before taking out a payday loan, you need to think carefully.

“The payday loan industry has been a parasite in this country. Most people just should never use them, ”Anker said.

The best approach is to check if there are cheaper credit options.

“Before you take the plunge, make sure you’ve explored all of the other options available to you,” Jackson said. “This includes talking to your bank about taking an authorized overdraft, joining your local credit union – or even asking your friends and family. “

To find your local credit union, visit Findyourcreditreunion.co.uk .

Ask for help

If you have money worries, you should seek help to regain control of your finances.

There are free debt services you can contact, including Citizensadvice.org.uk , Changerdepas.org , and Nationaldebtline.org .


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