The affordability rules
FCA rules require lenders to carry out reasonable affordability checks before granting credit. For payday and short-term high-cost loans, this includes considering your income, essential outgoings, and existing debt.
A lender who did not check properly, or who lent to someone with obvious signs of financial difficulty (multiple existing payday loans, gambling patterns, missed payments elsewhere), may have breached the rules.
The complaint process
Complain to the lender first in writing. Explain your circumstances at the time of the loan(s), including other debts and financial difficulties.
The lender has 8 weeks to respond. If they refuse or do not respond, take the case to the Financial Ombudsman Service.
The Ombudsman is free to use. Decisions are binding on the lender.
Typical outcomes
Successful complaints usually result in: refund of interest and charges paid on unaffordable loans, removal of associated negative credit file entries, and sometimes additional distress compensation.
Some lenders have gone into administration since the peak of payday lending — Wonga, QuickQuid, Amigo, and many others. Complaints against defunct lenders go through the Financial Services Compensation Scheme or the administrators.
Time limits
You have six years from the loan to complain, or three years from when you became aware of the problem — whichever is later.
Some old payday loans (from before 2015) may fall outside the time limits. Get advice on specific cases.