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 societies.
The lender is required to carry out sufficient checks to ensure that the loan can be sustainably repaid over the many months of its term. So this would usually mean the affordability checks would need to be more thorough than if a small amount of money was being borrowed over a very short space of time.
It is not enough for the lender to simply be happy to take on the ‘risk’ of lending you money; its checks need to be borrower-focused – ascertaining whether the customer can sustainably make the monthly repayments – without those payments causing the customer difficulty. Also, if the customer would need to borrow more money in order to keep up with the repayments on the loan, then this is also not sustainable, so would be irresponsible lending.
An Ombudsman made the following findings on a high cost credit case, which is typical of outcomes we have seen:
“it’s clear that Miss O’s income was pretty much being used to meet commitments to existing creditors. And she was using payday loans as well as her overdraft in an attempt to supplement her income and make ends meet. I think the proportionate checks would have shown 118 118 Money that she was likely to use this loan in the same way which meant she was unlikely to be able to repay it without borrowing further or suffering significant adverse consequences.”
If your claim is successful, you will get your interest back from your unaffordable loan.Apply Now
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.
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
|Band||Compensation Payout||Percentage rate the Success Fee is calculated on (including VAT)||Maximum Success Fee in band (including VAT)|
|1||£1 to £1,499||36%||£504|
|2||£1,500 to £9,999||33.60%||£3,000|
|3||£10,000 to £24,999||30%||£6,000|
|4||£25,000 to £49,999||24%||£,9000|
|5||£50,000 or more||18%||£12,000|
Below are examples of how this would work in practice.
|Lower example||Higher example|
|Band||Compensation Payout||Success Fee||Compensation Payout||Success Fee|
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.
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@example.com; (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.
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We are proud to have recovered over £67m for unaffordable lending claims since 2013
We’ve been claiming high cost loan refunds since 2013