💸 What Types of Loans Can You Raise a Complaint About?
- Included: High-cost loans, bad credit loans, bank loans, credit unions, car finance — both past and present.
- Status: Complaints can be raised whether the loan is active, repaid, defaulted, or in a payment plan.
- Consolidation loans: Even if they reduced your interest, affordability can still be reviewed.
- Car finance: Hire Purchase (HP) and PCP agreements also need to meet affordability rules.
- Guarantor loans: Borrowers and guarantors may both raise concerns.
- Exclusions: Mortgages usually fall under different rules.
🤔 What Does “Unaffordable” Mean?
According to FCA guidance, repayments should be manageable without needing further borrowing or causing financial difficulty.- Any lender: Affordability applies to banks, credit providers, and specialist lenders.
- Lender’s responsibility: For larger loans, they are expected to check affordability carefully, especially if you already had debts.
- Changes after approval: If your circumstances changed later (job loss, illness), lenders may not always be responsible.
⚙️ How Does the Complaint Process Work?
- Send your complaint: Contact your lender, explain why the loan felt unaffordable, and include details such as interest and charges paid.
- Using a clear template can help (see below).
- Attach supporting documents if possible — e.g., bank statements or credit reports.
- Wait for a response: Lenders usually have 8 weeks to reply.
- Escalate if needed: If you are not satisfied with the response, you can refer the matter to the Financial Ombudsman Service.
📩 Making a Complaint
Emailing your lender is usually the easiest way.- Subject line example: AFFORDABILITY COMPLAINT
- Include key details such as loan amount, interest rate, and repayment terms (if known).
- You can request:
- A refund of interest and charges you believe were unfair.
- Correction of any negative credit file entries relating to the loan.
- For any CCJ linked to this debt to be reviewed.
I’m raising a complaint about the affordability of the loan(s) provided. Please confirm the loan start date, amount, interest rate, and monthly repayments. I am requesting:Optional details you may include:
- A refund of interest and charges paid, plus statutory interest.
- Correction of any negative credit file information relating to this loan.
- For any CCJ linked to this debt to be reviewed.
- Why the loan was difficult to afford (e.g., low income, high living costs, existing debts).
- If you believe the affordability checks did not reflect your financial situation.
📇 Useful Lender Contact Emails
- Admiral Loans: loansquality@admiralgroup.co.uk
- Avant Credit: emailcomplaints@avantcredit.co.uk
- Everyday Loans (post 31 Mar 2021): complaints@everyday-loans.co.uk
- Vanquis: customer.relations@vanquisbank.co.uk
- Zopa: complaints@zopa.com
Affordability Complaints
What is “Affordability”?
Here’s a summary of the regulator’s rules:
- Checking Affordability at Application:
- Lenders must assess whether credit is affordable before approving it.
- The level of scrutiny depends on the type of credit. For instance, a mortgage application might require bank statements, whereas a £200 catalogue credit may need less detailed checks.
- Reassessing Affordability for Credit Limit Increases:
- Lenders should carry out new checks before increasing a credit limit to ensure it remains affordable.
- Defining Affordability:
- Credit isn’t affordable if repaying it leaves you without enough money for essential expenses, bills, or other debts.
- Signs of Unaffordable Borrowing:
- Relying on further borrowing to make ends meet—such as using a credit card to pay for necessities after making the minimum repayment—indicates the credit is unaffordable.
- Repayment Within a Reasonable Timeframe:
- Repaying only the minimum amount is acceptable for a short time but not over an extended period.
How to Complain
Reasons to Complain
You may have a valid complaint if the lender failed to recognize affordability issues. Consider these situations:
- At the Time of Application:
- Your credit record showed recent problems (e.g., missed payments, defaults, payday loans, mortgage arrears).
- You already had an account with the same lender, where you were only making minimum payments or using it for essential expenses like food or fuel.
- You were close to the limit on other credit cards or had persistent overdraft use.
- Your total borrowing was disproportionately high compared to your income.
- When Your Credit Limit Was Increased:
- Lenders should not increase limits if:
- You’ve only been making minimum payments for a prolonged period.
- You’ve used most of your credit limit for an extended time.
- Gambling transactions appear on your account.
- You’ve missed payments or entered into payment arrangements.
- Your overall debt has significantly increased on your credit report.
- Lenders should not increase limits if:
What You Need to Start Your Complaint
- Details of Credit Limit Increases:
You don’t need specific dates; stating “my limit was increased several times” is sufficient. - Credit Records:
Your current credit report (e.g., a free TransUnion statutory report) can help demonstrate pre-existing issues, even if you can’t access historical scores. - Complaints Process:
- Best Method: Submit your complaint via email for a clear record.
- Include your account details, date of birth, and the email address linked to the account.
Template for Complaints
- Start with Account Details:
I want to complain about irresponsible lending by you for my [credit card/catalogue] account [account number]. My date of birth is [dd/mm/yyyy], and the email address I used for this account was [your email].
- Explain Why the Account Was Unaffordable:
You should never have allowed me to open an account with such a large credit limit. When I applied in [year], my credit record would have shown [examples of financial difficulties, e.g., recent defaults, missed payments].
- Highlight Issues with Credit Limit Increases (if applicable):
You should not have increased my credit limit in [year]. At that time, I was [examples: making only minimum payments, using a high percentage of my limit, showing financial problems on my credit record].
By increasing my credit limit, you worsened my financial situation instead of offering help. For example, you could have frozen interest charges.
- Request a Refund:
I would like you to refund all the interest and charges from [specific date or the account opening], and I request that any late payment or default markers be removed from my credit records.
- Request Specific Details:
Please provide the dates and amounts of any credit limit increases in your response.
Points to Consider
- Timing:
Complaints can be made for open, closed, or sold accounts, including those with CCJs. If the account is older than six years, the Financial Ombudsman Service (FOS) may still consider your complaint if you’ve only recently learned about this process. - Evidence for Old Accounts:
Complaints for issues over six years old may be harder to support, but the FOS can decide whether to investigate. - Debt Alternatives:
If your financial problems are significant, consider debt solutions like a debt management plan (DMP). Contact National Debtline for advice. - Refund Expectations:
A refund typically covers interest and fees. If the balance owed is greater than the refund, consider asking if the debt collector can produce a valid Consumer Credit Act agreement for the account, as unenforceable debt cannot be pursued in court.
Responding to Rejections
- Rejections:
Lenders often reject complaints or offer low refunds. If you believe your complaint was dismissed unfairly, you can escalate it to the Financial Ombudsman Service.
