How do refunds work for loans and credit cards?
A loan is considered affordable only if you can repay it without needing to borrow more money or fall behind on your other financial commitments.
For credit cards, affordability is assessed based on the initial credit limit and any later increases. Lenders must ensure that the credit provided is sustainable and manageable for you to repay.
If a lender failed to carry out proper affordability checks before giving you credit, you may be entitled to a refund of the interest and charges you paid on borrowing that should not have been approved.
How we handle your claim
To pursue a claim on your behalf, we first need to understand your financial circumstances at the time the credit was provided and check whether the lender followed the relevant regulatory rules and responsible lending guidelines.
As part of our investigation, we will:
Request detailed information about your borrowing from your lender(s).
Review the information provided by your lender alongside the information you share with us through conversations or documents.
Assess whether the lender failed to carry out proper affordability checks.
Once we have gathered the necessary information, we will submit your complaint to the lender on your behalf and keep you informed throughout the process.
What happens next?
After receiving the complaint, the lender has up to eight weeks to review and investigate the case.
At the end of this period, they should issue a Final Response outlining their decision.
If the lender does not respond within the eight-week timeframe, we will follow up with them and keep you updated on the progress of your claim.
What happens after the lender responds?
Once the lender provides their Final Response, we will review it carefully to ensure they have properly considered all the complaint points raised.
If your complaint is successful and compensation is awarded, our fee of no more than 28% of the compensation recovered will be payable.
If the lender rejects your complaint
If the lender does not uphold your complaint or makes an offer that is not reasonable, they must give you the option to refer the matter to the Financial Ombudsman Service (FOS).
With your permission, we can escalate your complaint to the Financial Ombudsman Service on your behalf.
We may also refer your complaint to the FOS if:
The lender fails to provide a Final Response within eight weeks, or
The lender does not make a fair offer of compensation.
We do not use the court system to pursue these complaints, meaning there is no risk of court costs. The only fees payable are those outlined above if your claim is successful.
Important information during your claim
If you still have an outstanding balance or active account, you should continue making your normal payments while your complaint is being investigated. Missing payments could negatively affect your credit report.
If your claim is successful, any negative information recorded as a result of irresponsible lending may be corrected or removed, which could help improve your credit score.
Finally, making a complaint will not appear on your credit report.
Can you make a claim?
The amount you may be entitled to recover will depend on how much you borrowed and the interest and charges applied to your account.
If lending was unaffordable or irresponsible, you may be able to claim back the interest and charges you paid on that borrowing.
Our aim is to recover as much of these costs as possible, helping to reduce your debt or provide compensation where appropriate.
Reasons why your loans or credit cards may have been mis-sold
Your loan or credit card may have been irresponsibly provided if any of the following apply:
Proper checks were not carried out on your financial circumstances before the credit was approved.
You were given one or multiple loans that were not affordable or suitable for your financial situation.
Your credit limit was increased even though you could not afford the minimum repayments.
The borrowing became a significant proportion of your income, affecting your ability to pay priority expenses such as rent or mortgage payments, utility bills (water, gas, electricity), or everyday living costs.
You had to borrow from elsewhere (other lenders, credit cards, catalogues, or family members) to keep up with repayments.
The lender encouraged repeated borrowing or provided too many loans, which may breach responsible lending regulations.
The lender failed to offer assistance or support when there were clear signs you were experiencing financial hardship.