Many people are still unaware that there are rules in place for businesses in the UK to lend money responsibly. Many of these rules are set out in the Consumer Credit Sourcebook (“CONC”) section of the Financial Conduct Authority’s Handbook.
Even if you knew exactly what you were doing by approaching a lender to borrow money, and you wanted and needed the money, the rules mean that lenders should still be carrying out affordability checks. And if the lender did not do its job properly, you could be entitled to get the interest charges you paid on the borrowing, refunded back to you.
There are many different lenders and products in the UK – ranging from loans to credit cards. Affordability checks should be proportionate and so will vary in how thorough the background checks need to be. The type of affordability checks the lender needed to do will depend on various factors, including the amount of money being borrowed, over what length of time, and whether you were already a known customer of the lender (with a history of previously borrowing with them). Essentially though, the lender should be checking to establish that you can sustainably repay everything you owe over a reasonable period of time or the entire term of the credit agreement. Repaying sustainably means that it should not cause you too much difficulty to pay month after month from your income or savings. And it certainly wouldn’t be right if you had to borrow even more money just to afford the repayments on your existing borrowing.
We find that many lenders do not carry out the affordability checks they should have done. Or, whilst proportionate checks were carried out, the lender chose to overlook information which ought to have meant they declined the lending. For example, this might be because someone was already in severe financial difficulty before the lending decision was even made – so the lender ought to have known that any additional borrowing was simply not going to be sustainable. We’ve also seen examples of lenders repeatedly lending to the same customer time and time again – when the lender ought to have known that a harmful pattern of repeat borrowing – and persistent reliance on credit – had emerged.
In one of many upheld claims of this type, an Ombudsman commented:
“In my view, if Payday Express had seen all of this – as I think it would’ve done if it carried out proportionate checks – it would’ve realised Mr S was in no sort of position to be able to make the payments he was being asked to make from his income – he simply didn’t have the disposable income to be able to do so. So I think proportionate checks here would’ve shown Payday Express Mr S wasn’t in any sort of position to repay these loans. This means I think that not only did Payday Express fail to carry out proportionate checks before giving Mr S these loans, but Mr S also lost out because of this.”  https://www.financial-ombudsman.org.uk/decision/DRN4526679.pdf
In the event of a successful unaffordability claim – like the one outlined above – you would still be expected to repay the lender the principal amount borrowed. But you should get a refund of all interest and charges associated with the borrowing. Your credit file may also be amended to remove any negative information on your credit report – as a result of the unaffordable lending.
Allegiant has been processing these kinds of claims since 2013, and we are happy to answer any questions about starting a new claim.Apply Now
Catalogue companies make it easy for customers to purchase from them through credit facilities, but did you know they are under a regulatory obligation to ensure their lending is affordable? If you have ever struggled to repay a catalogue company or feel trapped by an endless cycle of unsustainable repayments you may have a claim.Catalogue Credit Claims
Many financially distressed UK consumers turned to guarantor loans when high street lenders would no longer lend. Guarantor loan companies accepted these customers as long as a friend or family member agreed to pay off the loan if the borrower did not pay. However, many guarantor loans were not affordable in the first place, and should not have been lent. If you borrowed and struggled to repay (or were a guarantor that had to repay), we could help.Guarantor Loan Claims
Doorstep loans have a long tradition in the UK, but many lenders have recently been exposed as lending without undertaking unaffordability checks. If you have taken out repeat door step loans due to necessity, you may have been mis-sold.Doorstep Loan Claims
Payday loans (or flexible high cost loans) are designed to meet a borrower’s emergency cash flow needs. However, some payday loan lenders lent repeatedly to UK consumers, when it should have been obvious to them that the customer was in a debt cycle. If this sounds familiar, you could claim compensation.Payday Loan Claims
High cost loans usually have high interest rates, but are due to be paid over a longer period of time – perhaps several years. Because they are due to be repaid over a longer period of time, they fall outside of the Financial Conduct Authority’s definition of ‘high-cost short-term credit’. Nevertheless, they carry many of the same pitfalls as ‘payday’ loans, and are often taken out by customers who struggle to obtain lending from banks and building societiesHigh Cost Credit Claims
We realise that claiming against a high cost loan lender can seem daunting. We aim to make the claiming process as simple as possible. We specialise in affordability claims. Our experienced team will communicate with the lender (and where required, the Ombudsman service) on your behalf. We use bespoke technology to ensure efficient claims handling. Throughout the process, we inform you of claim progress using a “stage process”, so you can track your progress easily. Please remember though, that you do not need to use a claims management company to make your complaint to your lender, and if your complaint is not successful you can refer it to the Financial Ombudsman Service yourself for free.
Pre complaint investigation and analysis
Formal mis-selling complaint made
Lender responds with a Final Response Letter
If appropriate resolution cannot be reached with the lender, referral to Financial Ombudsman Service.
As of the 1st March 2022, we have implemented a new fee structure which we have explained below. If you signed your contract with us prior to the 1st March 2022, please refer to your signed claims pack for our previous fee terms.
Our fees are owed upon a successful claim and will depend on the amount of redress you receive in cash in hand compensation. This means we charge on what you actually receive, not debt or tax deductions. If income tax is deducted from 8% statutory interest received and sent to HRMC, we do not charge you on this deduction.
If successful, your fee will be calculated based on which band your redress falls into and will be charged by whichever is the lowest of:
The below table outlines the redress bands, the maximum percentage rate of charge and the maximum total charge is for each band.
|Band||Redress||% Charge (including VAT)||Maximum charge (including VAT)|
|1||£1 – £1499||36%||£504|
|2||£1,500 – £9,999||33.6%||£3000|
|3||£10,000 – £24,999||30%||£6000|
|4||£25,000 – 49,999||24%||£9000|
Examples of how this would work in practice:
|Band||Lower example||Higher example|
|1||You receive £100 in redress; our fee would be £36.||You receive £1499 in redress; our fee would be £504.|
|2||You receive £1,600 in redress; our fee would be £537.60.||You receive £9,999 in redress; our fee would be £3,000.|
|3||You receive £12,000 in redress; our fee would be £3,600.||You receive £24,999 in redress; our fee would be £6,000.|
|4||You receive £30,350 in redress; our fee would be £7,284.||You receive £49,999 in redress; our fee would be £9,000.|
|5||You receive £55,000 in redress; our fee would be £9,900.||You receive £100,000 in redress; our fee would be £12,000.|
If you owe your lender money (e.g., because you are in arrears or have an active loan), they may use some or all of your compensation to reduce what you owe them. If this happens, our success fee will be calculated on the actual cash in hand compensation that you receive, for example:
|1||You recover £1,000 but owe the lender £800 for an outstanding loan, so receive £200 cash in hand. Our fee would be 36% inc. VAT of £200 which is £72.|
|2||You recover £8,000 but owe the lender £2,000 for an outstanding loan, so receive £6,000 cash in hand. Our fee would be 33.6% inc. VAT of £6,000 which is £2,016.|
|3||You recover £21,000 but owe the lender £9,000 for an outstanding loan, so receive £12,000 cash in hand. Our fee would be 30% inc. VAT of £12,000 which is £3,600.|
|4||You recover £40,000 but owe the lender £10,000 for an outstanding loan, so receive £30,000 cash in hand. Our fee would be 24% inc. VAT of £30,000 which is £7,200.|
|5||You recover £70,000 but owe the lender £17,000 for an outstanding loan, so receive £53000 cash in hand. Our fee would be 18% inc. VAT of £53,000 which is £9,540.|
You would pay us the fee once you receive your cash in hand benefit from your lender, and your outstanding loan will also have been paid off at no additional charge.
Please note, the above fee examples are for illustration purposes only. They are not an estimate of the likely outcome or fee you will need to pay. Each claim depends on its own merits.
You can cancel for free at any time within 14-days without giving any reason and without incurring any liability. You can communicate your cancellation by telephone, post, email or online.
You can cancel this agreement at any time after the 14-day cancellation period. However, if a complaint submitted by us is successful, the Success Fee will apply in the usual way.
You can cancel by post: Allegiant Finance Services Limited, Freepost RTYU–XUTZ–YKJC, 400 Chadwick House, Warrington Road, Birchwood Park, Warrington, WA3 6AE; (b) by email: [email protected]; (c) by telephone: 0345 544 1563; or (d) online at https://allegiant.co.uk/compliance/cancellation.
Allegiant Finance Services is widely regarded as a pioneer in the high cost loan claims management market.
Contactable by email, phone, or post, whichever you prefer
We will only correspond with you and keep your details secure. We’ll never sell your data.
Much more than a contact form. With our full online application process you will receive an instant automated decision on whether we can take on your claim
We are proud to have recovered £millions on behalf of our customers
We’ve been claiming high cost loan refunds since 2013