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Taking action over credit brokers
This page explains how you can take action if you’ve changed your mind about an agreement with a credit broker, or the credit broker hasn’t kept to the rules.
Your rights when you use a credit broker
When you use the services of a credit broker, you have certain rights, including the following:
- the credit broker can only charge you a fee if it’s been explained in writing and you’ve agreed to it in writing
- the credit broker has made it absolutely clear that they’re acting as a credit broker and not a direct lender
- you have a 14-day cooling off period, during which you can change your mind and get your money back.
These rules don’t apply to credit that is secured on land.
Changed your mind about agreement with a credit broker
If you change your mind about an agreement you made with a credit broker online or over the phone, you can cancel the agreement at any time within the first 14 days. You have the right to a refund of the money you’ve paid.
Contact the credit broker to tell them you want to cancel the agreement and get your money back.
The law giving you this right is the Financial Services (Distance Marketing) Regulations 2004. The credit broker should give you a full refund within 30 days. If they don’t do this, you can complain to the Financial Ombudsman Service.
Credit broker has taken fees you didn't agree or misled you
If a credit broker takes fees without following the rules, refuses to give your money back or doesn’t make it clear to you that they’re a credit broker, you may have the following options for getting your money back or complaining:
- complain directly to the credit broker
- report the broker to the Financial Ombudsman Service
- see if your bank will help you get your money back.
Complain directly to the credit broker
If a credit broker has taken fees you didn’t agree to or has broken the rules in some other way, you can complain directly to them.
In your complaint you should point out that the credit broker has broken rules set out by the Financial Conduct Authority (FCA).
You may also be able to argue that you’re covered by Section 155 of the Consumer Credit Act 1974. This limits a credit broker's charges to £5 if, following an introduction to a lender, an agreement is not signed within six months. If you have already paid more than £5 in fees or charges but haven’t yet got an agreement for a loan, the credit broker must refund the amount above £5 if you ask them to.
The FOS offers a consumer service that can contact the credit broker or bank on your behalf if you are having problems getting a refund. In most cases companies have refunded the money straightaway when the FOS has complained on a customer’s behalf.
See if your bank will help you get your money back
You may have another option for getting your money back, if you contact your bank. If you have had unauthorised deductions taken from your account, you may have a right to redress under the Payment Services Regulations 2009.
Financial Conduct Authority rules state that the bank must refund the unauthorised transaction immediately and remove any further bank charges, unless it has evidence that you did authorise the payment or were at fault.
The bank can’t simply say that because the broker used your details that you had authorised any payments.
Your bank should be willing to help you but if they don’t, you can complain using their internal complaints service first, to try and get a refund.
Getting the money back from your bank shouldn’t stop you complaining to the FOS as well.
Credit broker has shared your personal details
As part of the registration process with a credit broker, you may also tick a box saying that you agree to your details being passed on to ‘carefully selected’ third parties.
If you haven’t agreed to this but are receiving phone calls, text messages, emails and other communications from a company you haven’t given your details to, your credit broker may have passed your details on without your agreement. Some people even find that these third parties start taking money from their debit card or bank account.
You can report your concern to The Information Commissioner's Office. You must do this within three months of becoming aware that there is a problem. If money has been taken, this is an unauthorised fee, so you can get your money back in the same way as if you’d been dealing with the credit broker directly.
Report a concern to the Information Commissioner's Office.