Payday Loan FAQS
What is a Payday Loan?
A payday loan is a short-term loan intended to provide a quick solution to unforeseen emergencies such as boiler repairs, car repairs, even funeral costs.
Why may I have been Mis-sold a Payday Loan?
Payday loan lenders are supposed to check that the client can pay back the loan before lending the funds.
Most payday loan lenders follow a Good Practice Customer Charter (GPCC).
They also must follow rules set out by the Financial Conduct Authority (FCA).
This means they should:
- make it clear how much it would cost to repay the loan in total.
- check the finances and personal situation to ensure the loan can be comfortably paid back.
- tell the client that payday loans should not be used for long-term borrowing.
- tell the client that a payday loan should not be used if they are in financial difficulty.
How do I know if I am eligible to make a claim?
You may be eligible to make a claim if any one of the following reasons apply to yourself;
- if lenders did not follow the Charter or the FCA rules, a complaint can be drawn up and submitted.
- if a client is having difficulties paying back the loan, the first step would be to contact the lender, ask the lender to freeze the interest on the payments, and then work out a repayment plan.
- the lender did not make it clear how much it would cost in total to repay the loan – for example the price for each £100 borrowed, including fees and charges.
- the lender did not 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 did not tell the you that a payday loan should not be used for long term borrowing or if in financial difficulty