High-cost Credit questions and answers

Do you qualify to make a loan complaint?

If you answer YES to any of these questions, then you are likely to get the money spent on interest and charges back:

Did you take out multiple loans from different providers?
Were you using one high-cost credit loans to pay for the amount owed on another loan?
Did you skip eating meals or paying heating bills in order to pay back a high-cost credit loan?

Debt Hacker is a free tool to help you make a complaint to high-cost credit lenders.

You get to keep 100% of any money returned to you as a result of a successful claim.

Who can make a complaint against a high-cost credit lender?

Anyone who was sold an unaffordable loan can make a complaint against a high-cost credit lender or indeed any lender where you think the loan is unaffordable.

There is no time limit on how long ago the loan was made.

If you could not pay the loan back on time, had to pay your high-cost credit lender instead of paying bills, or you had to go without food or essentials to pay the loan, then your loan could have been affordable and you may be able to make a complaint.

It doesn't matter if you have paid off all your loans. Even if you managed to pay them off, they might not have been affordable.

What is a high-cost credit loan?

High-cost credit loans are where the representative APR is greater than 100% where the lender can charge up to 0.8% interest per day.

There are dozens of high-cost credit loan companies, including Lending Stream, Morses Club, Provident, and Satsuma. SafetyNet is licensed by the FCA but not as a high-cost lender.

How do I make a complaint against a high-cost credit lender?

Check out Debt Camel which is free and full of really helpful debt advice. Debt Camel was helping borrowers make unaffordable loan complaints long before Debt Hacker.

How long will my complaint take?

High-cost credit lenders have up to eight weeks to respond to your complaint. In some cases, they may reject your complaint or make an offer that is less than the full amount of interest. You can take this offer if you think it is good, but you may be better off refusing. The cost of resolving each complaint, if you refuse the offer - is paid for by the high-cost lender, as the service is free for consumers. This cost has risen from £713 two years ago to £960 now.

If there is no answer after eight weeks or you don’t want to take the offer then you can complain to the Financial Ombudsman.

Will this affect my credit file or credit rating?

Making a complaint will not affect your credit file or your credit rating. In fact, it could be good for your credit rating. If your complaint is successful, then you can get the loan removed from your record if you want.

Who decides whether my complaint is successful?

Once you have submitted your complaint, the lender has eight weeks to respond. If they don’t offer a full refund or one that you are happy with then you can pass the complaint to the Financial Ombudsman. The cost of resolving each complaint - which is paid for by the high-cost lender, as the service is free for consumers - has risen from £713 two years ago to £960 now.

The final decision on complaints is made by the Financial Ombudsman.

How much will I get if I make a complaint?

This all depends on your circumstances, how much you borrowed and how much interest you paid. You won’t be able to get a refund on the actual amount loaned, but you will be able to ask for interest, fees and charges you may have paid. If the loan is outstanding you be able ask for repayments to me made affordable in the light of your circumstances.

If successful, you may also receive 8% interest on top of interest and charges that are repaid.

The first loans are not always refunded, but if you have had quite a lot of loans, you may be able to receive refunds.

Many people have received hundreds of pounds back after a successful complaint, and it does not cost anything to make a complaint.

Can I make a complaint on a high-cost credit loan that I am still paying back?

Yes, you can make a complaint, even if you have not paid a loan back in full.

This is the case even if your loan has been passed to a credit agency or debt collector. But you should inform the debt collector of your complaint to the lender in writing. Your complaint is only against the lender, not the debt collection agency, but you can inform them about what you are doing.

If you really cannot afford to pay the loan back then you need to stop paying, cancel any direct debits, inform the lender and let them know why.

If you really cannot afford to pay the loan back then you need to stop paying, or cancel your continuous payment authority letting the lender know why.

You can cancel a continuous payment authority by contacting your bank. When you cancel a CPA it means you're withdrawing your permission for the lender to use your card details in the future. It is always best to try to speak to a lender directly if you are having problems repaying a loan, but if you receive a legal letter, a claim form or ‘letter before action’, seek advice from an expert such as Debt Camel.

Any related payments taken after you ask for a continuous payment authority to be stopped are considered to be unauthorised transactions. Card issuers must refund these payments and any related charges immediately.

If payments continue, contact your card issuer to arrange a refund. If it fails to do so, you should make a complaint to the card issuer and then, if you are not satisfied with its response, take the complaint to the Financial Ombudsman Service.

It is always best to try to speak to a lender directly if you are having problems repaying a loan, but if you receive a legal letter, a claim form or ‘letter before action’, seek advice from an expert.

If you need further advice check out Debt Camel.

What is an unaffordable loan?

This simply means that the loan you were offered was not one you could reasonably be expected to pay back on time.

It may mean that the loan was too high and the payments set too high a rate for you to pay rent and bills while paying back the loan.

The loan may be unaffordable if you are in persistent overdraft or already have other high-cost credit loans outstanding or had to cut back on food or heating to get by. Even if you managed to pay back the loan in full, it still could be viewed as unaffordable.

If you were given an unaffordable loan then the lender may have breached regulations, meaning you can complain and get back interest and charges.

If you want to understand more about unaffordable loans; then check out Debt Camel.

How do I know if I have been mis-sold a high-cost credit loan?

Were you struggling to pay back loans, were you in persistent overdraft or did you have returned direct debit at the time you took out the loan? If the answer is yes, and the University of Edinburgh report would suggest that is the case for many NHS workers, then the lender didn’t make proper affordability checks then you may have been mis-sold a high-cost credit loan and can complain.

A lender must check that you can afford to pay back the loan.

If the lender made you an unaffordable loan, you might be able to get a refund on interest and charges.

In all these cases, we would encourage you to make a complaint.

I have been declared bankrupt, should I still make a complaint?

Do not make a complaint if you are bankrupt now or have been in the past. Regardless of your bankruptcy status, any money you get back will go straight to the official receiver or trustee.

I’m in an Individual Voluntary Arrangement (IVA), should I make a complaint?

Do not make a complaint if you are currently in an IVA, as any money you get back will go straight to the IVA company.

I have a Debt Relief Order (DRO), should I make a complaint?

Do not make a complaint if you have a DRO, as any refund you get may mean that the DRO is cancelled.

A high-cost credit lender has offered some money, what should I do?

Sometimes, high-cost credit lenders will make you an offer after you have made your complaint. In most cases this will not be the full cost of the interest on your loans and any charges you may have paid.

Whether you take this or not is up to you. You may feel that an offer of most of this money may be enough and will save you time dealing with the Financial Ombudsman.

But, if the lender is making an offer, it is a clear sign that they think that the loan has been mis-sold to you. This means that the Financial Ombudsman is likely to rule in your favour. Turning down the offer and continuing with the complaint is often the only way to get 100% of what you may be owed. If you take an early offer then you may miss out. Check out Debt Camel for advice on settlements.

I ran up high-cost credit loans due to my gambling habit, can I still make a complaint against the lender?

If any loans were unaffordable for you then you can make a complaint against the lender. Spending the loans on gambling will not invalidate your complaint and may in fact help with it. Tell the lender if you took out multiple loans that you could not afford in order to gamble, or if you were borrowing to gamble in an attempt to pay off loans. You should detail any gambling addiction in your complaint and explain how it affected your income and ability to pay bills or buy food.

Claims management companies

You can use a claims management company to make your complaint, but they will take a percentage of your refund. Debt Hacker complaint letter is free and simple to use. All it takes is sending an email with the complaint letter to High-cost lender; then waiting 8 weeks for a reply. If you don’t get a reply in 8 weeks simply send the complaint letter to the Financial Ombudsman Service who will take it from there. It really is that simple and easy. If you do not want to use Debt Hacker then check out Debt Camel it is also a free service with lots of really helpful. So no need to use an expensive