It’s not a well known fact, but just like payday loan lenders, long term high cost loan lenders need to conduct affordability checks. If they don’t, and the loans were unaffordable, you could be entitled to compensation.
Unlike payday loan claims, you don’t need to demonstrate repeat borrowing. High cost loan claims can be made on as little as one loan, if it wasn’t affordable. That’s because these loans are longer and bigger, so the regulator expects proportionately better checks from the first loan.
The Financial Ombudsman Service has been upholding claims against high cost lenders such as 118 118 Money. This is very much a developing area. In recent decisions, we have seen the Ombudsman criticise certain lenders for ignoring adverse information on credit checks, which showed the borrower had understated outgoings on their application form.
Make a high cost loan claim.
If you have had a high cost loan which has worsened your financial position and left you struggling to get through the money after paying your instalment, you may be entitled to compensation.