Have I Been Mis-Sold A Payday Loan?

Published: 05/04/2018

What is a Payday Loan?

Payday Loans are short-term loans to cover unexpected expenses or tide you over until payday. The money is paid into your account usually very quickly and you repay the loan plus interest when you next get paid.

They are typically advertised as a way to fund unexpected purchases that come up days before the end of the month, when you are strapped for cash and waiting for payday.

How much can I borrow with a Payday Loan?

Usually you can borrow up to £1,000. Many Payday Loans are even smaller, at just a few hundred pounds. The time period of this type of loan can range from one day to several months. Payday Loans come with fees for setting up the loan, and interest, which is usually calculated daily.

Are Payday Loans expensive?

Payday Loans have high interest rates, so yes - they are expensive. However, they are not necessarily any more expensive than other traditional alternatives, as long as you pay them off in time. If you miss a payment or roll over your loan, charges can quickly mount. Your interest will increase and fees could start to be applied. Soon you may find yourself in financial trouble.

Should I take out a Payday Loan, if I really need some cash, quick?

This article does not set out to encourage or discourage the use of Payday Loans.

If an unexpected expense arises at the last minute prior to payday, a payday loan may be a plausible option for you. It is a quick and easy way to access funds. That is, if you can afford to pay it back, on time. If you cannot afford to pay back the loan, then there is a big problem.

Will my Payday Loan application be accepted by the lender?

This depends on whether the lender follows the law.

Before agreeing to lend, the lender must check if you can afford to make the loan repayments (an ‘affordability check’).

If they fail to adequately do so, they are breaking the law and you may have been mis-sold your Payday Loans.

What is Payday Loan mis-selling?

If you can only repay your Payday Loan by borrowing money again or borrowing from a different lender; you need to make late payments; or if you are unable to pay other bills due to needing to repay the original Payday Loan, chances are, you shouldn’t have been given the loan in the first place.

The bottom line is, if you can’t afford to comfortably pay back yourPayday Loan, your loan may have been Payday Loans and you could be entitled to a refund.

Are Payday Loans mis-sold often?

In short, the answer to this question is yes.

It was reported in mid 2017 that complaints about payday loans to the financial ombudsman had tripled in just one year. The Financial Ombudsman Service said it had received more than 10,500 complaints, compared to just 3,216 in 2015-16.

More than half (59 percent) of those complaints were upheld by the Ombudsman service in the consumers’ favour.

Campaigners against Payday Loans claim that lenders target the most vulnerable borrowers and do not do proper affordability checks on them before granting loans.

Furthermore, costs are not always clear and some lenders encourage consumers to take on more borrowing.

This is wrong.

What do I do if I think I have been mis-sold a Payday Loan?

First, ask yourself these two questions:

  1. Were you able to make the loan repayments comfortably and on time?
  2. Was your Payday Loans a one off?

If the answer is no, you could be entitled to a refund. At the very least, you should make a complaint. You can make a complaint to your lender yourself. You should do so in writing. The lender has eight weeks to reply. If the lender does not respond, you can then escalate the issue to the Financial Ombudsman Service (FOS). Alternatively, you can ask an experienced financial claims solicitor to check if your payday loan was mis-sold and deal with your claim on your behalf.

The benefits of hiring a solicitor include:

  • They understand the claims process and know how to deal with lenders, who are notoriously difficult to get a hold of and make progress with
  • There is no stress involved - the solicitor does all the hard work for you!
  • You save time - dealing with lenders is time-consuming, annoying and can break havoc on your phone bill
  • Many solicitors such as GWlegal are No Win, No Fee, so you don’t pay anything if you’re claim isn’t successful
  • Our solicitors have years of experience in financial claims. We can help you claim up to 100% of all interest and charges you paid on your payday loan, along with 8% statutory interest. We can also have negative information about the mis-sold loan/s removed from your credit file.

How much money can I claim?

This totally depends on your individual circumstances; however GWlegal’s largest settlement to date is £10,735.26.

Who are GWlegal?

GWlegal are a financial claims solicitors based in Liverpool, specialising in PPI claims, payday loans claims, packaged bank account claims and housing disrepair claims.

If you have a legal matter you wish to discuss, don’t hesitate to get in touch. You can call us on 0345 373 3737 or email us at hello@gw.legal with your question. Who are GWlegal? We’re a national firm with local values.

Do you think you have been mis-sold a payday loan?

Click here to send us an enquiry

Content correct at time of publication.

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