Why is this important?
Payday loans - reasons to complain about your lender
A payday loan is a short-term loan intended to tide you over until you get paid. Most payday loan lenders must follow a Good Practice Customer Charter. They also 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 eight weeks, you can make a complaint to the Financial Ombudsman Service.
This page tells you what you can complain about if your payday lender doesn’t follow the rules.
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. If you have a complaint about a payday lender, you leave your phone number at the end and someone from the Financial Ombudsman Service will call you back to talk to you.
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 did not tell you that a payday loan should not be used for long term borrowing or if you are in financial difficulty
- the lender did not 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 that was sent to you by email or text message. From 1 July, all payday loan adverts must include the warning.
If you've had problems repaying the loan
If you've had problems repaying the loan, you can complain if your payday lender:
- did not deal with you sympathetically and positively
- did not offer to freeze interest and charges if you are able to make payments under a reasonable repayment plan
- did not tell you about free and independent debt counselling organisations
- pressurised you to extend the loan – explain how many times you've done this and how much you paid each time
- did not tell you about the risks of extending the loan
- did not make clear exactly how much it would cost to extend the loan – give details of information they missed out
- did not 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.
If you fill in our quick survey and leave your phone number at the end, someone from the Financial Ombudsman Service will call you back to talk to you about your complaint.
- Find out more about making a complaint
- Use our template letter to help you make your complaint
- Fill in our survey about payday lenders
- Get help making a complaint to the Financial Ombudsman Service - call 0300 123 9 123 or 0800 023 4567
- Find out more about what you need to do before you can complain to the Financial Ombudsman
Other useful information
- The Financial Ombudsman's website has useful information on how to make a complaint at: www.financial-ombudsman.org.uk