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Payday loans - reasons to complain about your lender

This advice applies to Wales

A payday loan is a short-term loan intended to tide you over until you get paid. Payday loan lenders need to follow certain rules set down by the Financial Conduct Authority (FCA).This means they should check certain things and give you certain information before lending to you.

If a payday lender doesn't follow the rules, you can make a complaint. If you're not satisfied with the response or they don't get back to you within 8 weeks, you can make a complaint to the Financial Ombudsman Service.

What you can complain about

You can make a complaint about your payday lender if:

  • the lender didn’t make it clear how much it would cost you in total to repay the loan - you should have been given an example of the price for each £100 borrowed, including fees and charges
  • you weren’t given full or accurate information about how and when to pay back your loan – explain what was missing or inaccurate
  • the lender didn’t check your finances or personal circumstances to see if you were in a position to pay back the loan – explain anything which they should have taken into account, such as your age, mental health, employment status, income, expenditure, proof of identity or financial history
  • the lender didn't tell you that a payday loan shouldn't be used for long-term borrowing or if you're in financial difficulty
  • the lender didn't tell you what to do if you have a complaint
  • the lender didn't set out clearly how continuous payment authority (CPA) works and your right to cancel it. CPA is where you agree to pay the loan by making a series of deductions from your credit or debit card
  • the lender didn’t tell you in advance that they were going to take money from your account using the CPA
  • the lender didn’t include a risk warning about late repayment in its online advert, or in an advert sent to you by email or text message. All payday loan adverts must include the warning
  • the lender has charged you more interest and charges than it’s allowed to under the FCA rules

If you’re struggling to repay your payday loan because of coronavirus 

Your payday lender might agree to reduce or pause your payments temporarily. You can check what to do if you can’t repay a payday loan.

If you've had problems repaying the loan

If you've had problems repaying the loan, you can complain if your payday lender:

  • didn't deal with you sympathetically and positively
  • didn't offer to freeze interest and charges if you're able to make payments under a reasonable repayment plan
  • didn't tell you about free and independent debt counselling organisations
  • pressured you to extend the loan – explain how many times you've done this and how much you paid each time
  • didn't tell you about the risks of extending the loan
  • didn't make clear exactly how much it would cost to extend the loan – give details of information they missed out
  • didn't check your personal finances and general situation to see if you are able to pay back an extended loan.

Other things to put in your complaint

When you're making your complaint, there may be other things you can say about how the loan has affected your life which may affect the outcome of your complaint. For example, can you say:

  • there are things you can no longer afford as a result of the loan
  • how the loan has affected your family life
  • you feel your debt is getting out of control

How to complain

You can use the reasons on this checklist to help you make a complaint to your payday lender or to the Financial Ombudsman Service.

Next steps

Other useful information

Check how to make a complaint  on the Financial Ombudsman Service website.

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