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Irresponsible Lending Claims (Loans & Credit Cards)

Lenders who gave you credit you couldn't afford must pay it back.

#At a Glance
Difficulty ā­ā­ Medium
Time to DIY 2ā€“3 hours
Average Payout Ā£500ā€“Ā£5,000+
Time Limit 6 years
Escalation Financial Ombudsman Service

#What Is It?

Lenders must check you can afford to repay before giving you credit. If they didn't do proper checks ā€“ or the checks would have shown you couldn't afford it ā€“ that's irresponsible lending.

Types of credit covered:

  • Payday loans (Wonga, QuickQuid, etc.)
  • High-cost short-term credit
  • Credit cards
  • Personal loans
  • Catalogue credit (Very, Littlewoods)
  • Guarantor loans
  • Car finance (separate from commission claims)

#Am I Eligible?

#āœ… You likely have a claim if:

  • You took out credit you couldn't realistically repay
  • Proper checks would have shown you already had too much debt
  • You were relying on credit to pay other credit
  • You had multiple payday loans in quick succession
  • The lender didn't verify your income or expenses
  • You were on benefits or very low income

#āŒ You're less likely to succeed if:

  • The credit was genuinely affordable at the time
  • Your circumstances changed unexpectedly after borrowing
  • You misled the lender about your finances

#How Much Could I Get?

What You Get Details
Interest refund All interest and fees you paid
8% simple interest Added to the refund
Credit file correction Negative marks removed
Outstanding balance May be written off or reduced

Payday loan example:

  • 10 loans over 2 years, paid Ā£2,000 in interest/fees
  • Refund: Ā£2,000 + 8% interest = Ā£2,320+

#Step-by-Step Process

#Step 1: List All Your Problem Credit

  • Which lenders?
  • When did you borrow?
  • How many times?
  • What fees/interest did you pay?

#Step 2: Get Your Credit History

  • Request credit reports from all three agencies: Experian, Equifax, TransUnion (free via statutory request)
  • Shows all credit accounts and payment history
  • Helps identify lenders you may have forgotten

#Step 3: Request Loan History from Lenders

  • Send Subject Access Request to each lender
  • They must provide your full borrowing history free
  • Shows exact amounts borrowed, repaid, and fees charged

#Step 4: Submit Complaints

Write to each lender separately explaining:

  • Why the lending was unaffordable
  • What checks should have shown
  • What refund you're claiming

#Step 5: Escalate If Needed

  • Lenders have 8 weeks to respond
  • Escalate rejected claims to Financial Ombudsman
  • FOS regularly upholds payday loan complaints

#Red Flags Lenders Should Have Spotted

  • Multiple loans in quick succession
  • Borrowing to repay other loans
  • Defaults or missed payments on credit file
  • High debt-to-income ratio
  • Benefit income as primary income
  • Gambling transactions
  • Very short time between payday loans
  • Increasing loan amounts each time

#Defunct Lenders

Many payday lenders have gone bust (Wonga, QuickQuid, Peachy, etc.). If your lender has failed:

  • Check if there's an administrator handling claims
  • Some may be covered by FSCS (unlikely for most payday lenders)
  • You can still complain ā€“ even a small dividend payment is better than nothing

#Common Questions

Q: I still owe money to the lender ā€“ can I claim?

Yes. Your complaint may result in the debt being written off or reduced as well as compensation.

Q: I had 20+ payday loans ā€“ is that too many to claim?

No ā€“ that's actually stronger evidence of irresponsible lending. The lender should have stopped approving you.

Q: The company has gone bust ā€“ is it worth claiming?

Possibly. Administrators sometimes pay dividends to complainants. It costs nothing to try.

Q: I lied on my application ā€“ can I still claim?

If the lender didn't verify your claims when they should have, you may still succeed. But be honest in your complaint.