Pre Contract Information – Unaffordable Lending Claims

There are potential positives and negatives in making a claim. Here are some things you might want to consider:-

Things you might consider positive

• If you win your complaint, you will get a cash payment from your lender or a reduced or written-off balance.
• The credit entries may be removed from your credit record. This can remove entries that could damage your credit score.

Things you might consider negative

• You may not win, resulting in lost time.
• You may feel uncomfortable giving or discussing your financial history with us (however, our team are very familiar with unaffordable lending issues – you’re in good hands).
• Your lender may refuse to lend to you in the future. This may include its linked brands. Your lender may suspend or withdraw the credit you’re complaining about and any other credit you have with it whilst it investigates the complaint.
• If your complaint relates to a guarantor loan and your guarantor has made payments, a potential outcome may be that the guarantor is refunded their payments resulting in an increased balance. If this happens, we will challenge this with the lender and/or FOS.
• If your complaint is about a car finance agreement, and you still have your car, a potential outcome is that you may be asked to return the vehicle as part of the resolution (this would not happen if the finance agreement is already paid off).

These are things we suggest you think about, but you should think about what claiming means for your situation.

If you are paid a compensation payout because of a claim we make for you, we will charge you a fee for our service. If you don’t receive a compensation payout, you don’t pay us anything.

Our charges start at 36%, including VAT and go as low as 18%, including VAT, for bigger claims. You can learn more about our fees later in this document. For now, the important bit we want you to take away is that we offer a service you pay for, but only where your lender makes a compensation payout.

As a transparent claims management company, we only want to help customers who have thought about the different ways of claiming and decided to use a claims management service they are happy to pay for. So, it is important we tell you this:-

You do not need to use a claims management company to make your complaint to your lender. If your complaint is unsuccessful, you can refer it to the Financial Ombudsman Service for free.

If you decide that you want to use a claims management company, it is always a good idea to compare different companies to work out the best fit for you.

Another way of claiming is by using a solicitor. Solicitors differ from claims management companies as solicitors can bring claims in court (a more formal process than FOS). They can also use FOS too. If this interests you, we recommend that you seek independent legal advice from a solicitor. If you have legal expenses insurance, solicitor costs may be covered (which may mean that you keep more of your money than using us).

What we will do

If you decide to use our claims management service, you must sign a legally binding contract with us.

Once you have a contract with us, we will get information about your financial circumstances. This includes your borrowing history, before and after the credit you’re complaining about.

This often includes you giving us (or giving us consent to get) information like:-

• bank statements from when you were borrowing
• your credit report
• your lender’s file.

We will also use the information you provide to us in web forms or surveys.

Once we have the information we need, we will review whether your lender acted fairly and reasonably when lending to you.

When we review your case, we will think about the rules relating to the type of credit you had and your personal circumstances.

We will also think about decisions and guidance from the Financial Conduct Authority (FCA) and Financial Ombudsman Service (FOS).

If we think your lender might have done something wrong when lending to you, we will write to them explaining why we feel that their lending was not fair and reasonable. We will usually ask the lender to fix this by:-

• giving you a refund of interest and charges you have paid on the amount of the credit;
• updating your credit records to remove details relating to the mis-sold credit; and
• to add interest at 8% a year on payments you have already made.

Keeping you up to date.

We will keep in touch about your claim, usually by email. We may also contact you by phone or by other written methods (letter, text message or website portal). This will often include telling you: –

• that we have sent the claim to your lender;
• that the lender has acknowledged your claim; and
• when we receive the lender’s final response or that we have not received a response by the deadline.

If we refer the matter to the Financial Ombudsman Service, we will also tell you: –

• when we have made the referral;
• when the Financial Ombudsman Service acknowledges receipt of the claim; and
• whenever there is an important development or pause.

Sometimes there can be delays outside of our control. If this is the case, we will still update you at least every 12 weeks.

If we can’t sort things out with your lender directly

If your lender’s response isn’t good enough, we can involve the Financial Ombudsman Service for an independent decision.

Claims are decided based on opinion, so we can’t make you any promises about the result

If we agree to make a claim for you, this does not mean the claim will be won. So, it is important for you:-

• to keep up payments with your lender (as best you can).
• not to make plans about receiving compensation and that you manage your day-to-day finances without thinking about any compensation you may get in the future.

How long it will take

Typically, we would say:-

• for claims resolved directly with your lender, about 8 to 20 weeks (unless the lender has a very big backlog).
• for claims involving the Financial Ombudsman Service, cases can take a further 8 to 52 weeks.

These timescales are rules of thumb. Some cases can be resolved more quickly, and rarely, some cases can take several years if there are very complex issues.

Who will perform the work

Our team here at Allegiant will look after your claims. The team is made up of direct employees, and sometimes contractors, that we have fully trained.

Our success fee is due only if your lender makes a compensation payout, and is calculated on the amount of the compensation payout. We do not charge you for any part of a settlement that results in the lender reducing your outstanding balance – that is on the house!

The success fee amount is calculated using a band charging system. There are five charging bands. Each band has a maximum amount that we will charge.

Success Fee Charging Table

Below are examples of how this would work in practice.

If you want to see how much we would charge for a specific amount, please visit our online fee calculator at https://allegiant.co.uk/unaffordable-lending-claim-fees.

Please note that the examples in the tables are for illustration purposes only. They are not an estimate of the likely outcome or success fee.

Cooling-off period

You can cancel with us for free within a 14-day cooling-off period, which starts on the day after we receive your signed terms of engagement.

Outside the cooling-off period

After the 14-day cooling-off period, you can still cancel. You will not need to pay a cancellation fee, but you will still have to pay a success fee calculated on any offer we obtain for you and where you later accept that offer or beat it. Where this happens, our success fee will be calculated based on the offer we obtained.

If you need to make a complaint, you can do this by letter, email or phone, or any other reasonable way.

We will aim to acknowledge your complaint within five working days.

We will also send you a link to the process we will follow.

We will then write to you with a final response or to tell you that we are not in a position to give you a final response within eight weeks.

In either case, we will tell you about your right to refer the matter to the Financial Ombudsman Service.

For full details, please see the complaints section of the terms of engagement or go to allegiant.co.uk/compliance/complaints-regulated/.

Our privacy policy is available at allegiant.co.uk/compliance/privacy-policy/