I don’t think the company that sold me a doorstep loan carried out proper affordability checks and now I can’t afford to pay it back. Can I get a refund?
The Financial Conduct Authority which regulates the doorstep loan market says a loan is unaffordable if you can’t make repayments without borrowing again.
Lenders must check your finances and situation – including future income and spending – to make sure you can pay back the loan.
You might feel your agreement was unaffordable if you were given a loan that was more than you could manage to repay and it caused you problems.
If you think you are owed a refund, first complain to your lender. List the ways you think their affordability checks were not properly done, the problems this has caused, and what you would like to happen.
The lender must acknowledge your complaint promptly and has 8 weeks to respond formally or resolve your problem.
If they accept your complaint, they may agree to write off the balance on the loan or refund some of the interest you have paid.
If you aren’t happy with their response, or they don’t respond at all, you can complain to the Financial Ombudsman Service using a form on its website.
The Ombudsman can force the lender to write off the interest or even the remainder of the loan. If they uphold the complaint, they may also order them to pay a small amount of compensation for your distress. The Ombudsman’s decision is binding on your lender.
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