Good to know: You do not need to use a claims management company to make your complaint to your lender. If your complaint is not successful you can refer it to the Financial Ombudsman Service yourself for free.

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Overdraft claims: What you should know.

Millions of people in the UK have an overdraft facility, but many people don’t stop to think about whether an overdraft is right for them, or consider whether the lender was acting responsibly in providing the overdraft in the first place. The Financial Conduct Authority outlined the following in its consultation paper on overdrafts:

“Overdrafts are primarily intended to provide short-term credit. But our research shows that many consumers use arranged overdrafts regularly over long periods, and so incur charges for prolonged periods. For these customers, an overdraft may not be the best way of borrowing.” [1] https://www.fca.org.uk/publication/consultation/cp18-42.pdf (2.5)

So what are the rules on overdraft lending?

The lender needs to ensure that you are able to repay your overdraft within a reasonable period of time. It is not fair and responsible for a lender to continue to charge for the overdraft facility, or extend the limit, where it is clear that the overdraft is not being used as it should – and is instead being used over a prolonged period of time.

Are customers winning overdraft claims?

Yes. We have seen examples of claims being upheld where customers have been constantly using their overdraft, whilst experiencing financial difficulties with other credit. This might include customers who took out payday loans at the same time as being in an overdraft, or customers whose income is mostly made up of state benefits.

In one Decision about a TSB overdraft, an Ombudsman said:

“A cursory look at Mrs R’s statements in the period leading up to her overdraft being provided shows that she was already struggling to manage her money. She was regularly and repeatedly overdrawn. And the credits going into the account indicated Mrs R would struggle to  sustainably repay an overdraft and certainly not for an amount anywhere near the limit of £3,000.00 she was eventually provided with.” [2] https://www.financial-ombudsman.org.uk/decision/DRN-2979403.pdf

If your claim is upheld, you can expect to get your interest, fees and charges back from the point at which it was no longer affordable for the overdraft facility to be in place.

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Our Unaffordable Lending Claims Process

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.

  • Step 1

    Pre complaint investigation and analysis

  • Step 2

    Formal mis-selling complaint made

  • Step 3

    Lender responds with a Final Response Letter

  • Step 4

    If appropriate resolution cannot be reached with the lender, referral to Financial Ombudsman Service.

Our Fees

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:

  1. the maximum percentage rate of charge for that band, or
  2. the maximum total charge for that band.

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 (with VAT) Maximum charge (with VAT) (£) Maximum charge (without VAT) (£)
1 1 – 1499 36% 504 420
2 1,500 – 9,999 33.6% 3000 2500
3 10,000 – 24,999 30% 6000 5000
4 25,000 – 49,999 24% 9000 7500
5 50,000+ 18% 12000 10000

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:

Band 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.

Cancellation

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.

Genuine Customer Reviews

The Smart Choice For Unaffordable Lending Claim Representation

A trusted name

Allegiant Finance Services is widely regarded as a pioneer in the high cost loan claims management market.

Friendly and experienced advisors

Contactable by email, phone, or post, whichever you prefer

Confidential & Discreet

We will only correspond with you and keep your details secure. We’ll never sell your data.

True Online Application System

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

Over £60+ million recovered

We are proud to have recovered £millions on behalf of our customers

Proven Track Record

We’ve been claiming high cost loan refunds since 2013

Claiming for Free Yourself

Good to know: You do not need to use a claims management company to make your complaint to your lender. If your complaint is not successful you can refer it to the Financial Ombudsman Service yourself for free.