Pay day loan compensation
Ever had a payday loan? You may be entitled to claim compensation if you were mis-sold the loan…
This quick 2 minute guide will give you a rough idea if you’re entitled to compensation.
What is a payday loan?
- A payday loan is a short-term loan with a high APR.
- They are loved because of how fast the money is paid to you, making them ideal for emergency situations. It is quick and easy to apply for one of these loans, you could have the money in your bank account within 30 minutes.
- Before to January 2015, payday loan companies did not have to cap their interest rates. Because of this some lenders charged as much as 7000% interest.
What went wrong?
Payday loan lenders have a duty of care towards their customers which means they must carry out checks to confirm that their loan is affordable to them.
Your financial background should be checked and you should be clearly explained any fees or charges that will incur with the loan.
Many payday loan companies were not carrying out these checks efficiently enough meaning some of their customers were building up a huge amount of debt that they could not afford.
Am I entitled to compensation?
- If your payday loan lender did not make any fees or charges you would incur clear to you
- If you had to repeatedly roll-over a loan month after month. That shows that you could not afford to take out the first loan in as you couldn’t make the payments which resulted you being mis-sold the loan.
- If you had to take out a loan from another payday lender in order to pay off your first loan
- The loan was a large amount of your income meaning you couldn’t pay it in time as you would not have been able to pay for the basics such as food, pay your mortgage or bills etc
You have to be sure that your payday lender did not carry out the proper checks before lending you the cash and that the loan was not affordable to you at that time.
How can I make a claim?
- Gather all the information you can about your payday loan/loans.
- You will need the following… The date the loan was taken out, any interest and charges that were added, if you had to roll over the loan to afford to get by, details of any missed payments, the date you paid your loan in full or the amount you are still paying and try and find out if the lender ran any credit checks prior to approving your loan
- It is best to get all of this information directly from your payday loan provider as you will be sure it is correct, you don’t have to tell them why you are asking at first.
- Once you have all of that information, contact the payday loan lender to register a complaint on the grounds that the loan you were given was not affordable and request a refund for the charges and fees that were added to the loan.
- Try and back up your case with any personal information about your finacial situation situation at the time of the payday loan.
- You should hear from your lender within 8 weeks to let you know if you will or will not be rewarded any compensation. If you do not hear from your lender within 8 weeks then you can take your complaint to the Financial Ombudsman.
- You can see the Financial Ombudsman complaint section here…
Feel free to pass this information on to any family and friends who may have had a payday loan in the past.