What happens when I make a complaint about payday loans? Will I get a refund?

We have talked a lot about why people should make a complaint about mis-sold, unaffordable payday loans and getting money back. But we have not spoken so much about the process itself.

So, what happens when you use the Debt Hacker complaints tool to make your complaint against a payday lender, such as Wonga, QuickQuid, MyJar or Lending Stream? Is making a payday loan affordability complaint like a PPI refund claim? And when can you expect to get money back?

What do you need from me to make a complaint about my payday loan?

When you start your complaint, you will be asked for some simple details about your payday lender and loan, followed by some personal information. We will then ask for more detailed information about your loan and why it may have been unaffordable for you.

It helps to have any information about your loan to hand when you start your complaint. That way you will be able to tell us about dates, account numbers, amounts and your own financial situation at the time of the loan. It may take a little longer to do than an application for an instant payday loan, but it will be worth it.

You will need to show that the lender did not give you adequate information, check your finances correctly or put you in a position where you could not afford day-to-day living or other bills. Rolling over loans or borrowing from one lender to pay another should also illustrate that a loan was not affordable.

I’ve submitted my payday loan complaint. So, what happens now?

The lender should send you an acknowledgment within five days, but has eight weeks to respond to your complaint in full. They may reply a lot sooner, however. This may be to ask for more information, make an offer, agree to your claim, or reject your claim.

It is up to you whether you agree to an offer made by a lender, but do remember that this is a first offer and an acknowledgment that they have got something wrong. If you carry on then you may get more money back, including all the interest and any fees you paid on your loan. You should always ask the lender to ensure that the loan is removed from your credit file when accepting any offer, whether it is for full or partial repayment.

What if they turn down my complaint or I disagree with the offer?

If you believe that a first offer of money back is less than you should get then you can write back to the lender and ask for more.

If you are not happy with the next offer, or if the lender turns down your complaint then you should make a complaint to the Financial Ombudsman Service. Lenders are keen to avoid this, as they are charged £550 for each complaint, regardless of whether your complaint is upheld or not.

The ombudsman will look at your complaint and make a final ruling on your case, including the removal of the loan from your credit file. This process will usually extend the claim period for around another eight weeks.