Why is this important?
Payday loans - buying goods
There are many different types of credit agreement, which give you different rights if there's a problem with something you've bought. Credit providers may not always tell you what type of credit agreement they’re offering you, so you may not be aware of your rights.
If you have a consumer problem with something you've bought on credit, it's important you check what kind of agreement you've got before you take any action.
This page tells you about what you can do if there's a problem with something you bought with a payday loan.
Payday loan survey
Tell us about your experience of borrowing from a payday lender. You can help Citizens Advice make sure payday lenders behave fairly and responsibly and follow the rules in future.
What is a payday loan?
A payday loan is a cash advance on your salary which you pay back to the lender when you receive your salary. Loans are available from high street shops and internet sites and you usually pay the money back using a post-dated cheque, debit or credit card. Interest rates are high.
Are payday loans regulated?
Payday loans are regulated by the Consumer Credit Act 1974 and your lender may belong to a trade association that has a code of practice, for example, the Consumer Finance Association (CFA).
All companies that offer pay day loans must have a credit licence. You can check with the Office of Fair Trading whether your pay day lender has a credit licence. If they don't, this is against the law and you should report them to Trading Standards.
If something goes wrong with the goods you’ve bought
If something goes wrong with the goods you’ve bought using cash from a payday loan, you may have rights under consumer law to get a refund, repair or replacement. You will have to contract the trader to sort out your problem.
The payday lender is not responsible for any problems you have with something you’ve bought with the loan.
However, if you put the loan into your bank account and then paid for something using a debit card, you may be able to get a refund from your debit card provider if they belong to a Chargeback scheme.
Other useful information
- More about the Consumer Credit Act 1974.
- Check whether your conditional sale agreement lender has a credit licence
Consumer Credit Association (CCA)
The Consumer Credit Association (CCA) represents over 75 per cent of firms that provided unsecured loans in the home credit industry. The CCA has a code of practice which its members must comply with, as well as a Business Conduct Pledge.
The CCA also has internal conciliation and arbitration schemes to help resolve complaints made against its members.
Consumer Credit Association (CCA)
Consumer Credit Trade Association (CCTA)
The Consumer Credit Trade Association represents credit lenders including finance houses, retailers and building societies. The CCTA has a code of practice with which its members must comply.
The CCTA has an internal conciliation scheme to resolve complaints made against its members. There is also an independent arbitration scheme, run by the Chartered Institute of Arbitrators.
Consumer Credit Trade Association
Suite 4 The Wave
1 View Croft Road
Finance and Leasing Association (FLA)
The Finance and Leasing Association represents the UK and finance leasing industry, including creditors offering hire purchase and conditional sale agreements, secured and unsecured loans, credit cards and store cards. The FLA has a code of practice with which all its full members must comply.
The FLA has an independent arbitration scheme for consumer complaints which is run by the Chartered Institute of Arbitrators.
Finance and Leasing Association
15 - 19 Kingsway
Consumer Finance Association code of practice www.cfa-uk.co.uk.