MARTIN Lewis’ MoneySavingExpert revealed how to recover thousands of pounds from payday lenders after a reader was paid back Â£ 9,300.
Consumer Champion urges borrowers who have already taken out a loan, paid a bank account or overdraft fee, or requested a PPI refund to check if they may be due money back.
He comes after a warning MSE the reader, Emma, ââhas demanded thousands of pounds in interest payments and compensation for 72 payday loans.
Separately, she also received Â£ 800 compensation and reimbursement for credit card charges and overdraft charges after challenging the affordability and suitability of the loan.
Emma explained how she had been dealing with “serious and persistent debt” for a decade before finally speaking to her partner about it last year.
As part of her plan to get back on track, she agreed to interest-free, discounted payment plans with catalog and store card companies, and curbed her spending.
Using the “snowball” method, the money saved was diverted to paying off the most expensive debts before turning to the next one.
âIn short, I went from over Â£ 20,000 in debt to debt free and savings in less than a year thanks to your advice and the help of my partner,â he said. she declared in an e-mail included in the latest advice bulletin.
âRecover, Recover, Recover. In many industries, customers have been misinformed, mis-sold, abused and need to be reimbursed, and you DON’T NEED TO PAY ANYONE to do it,â MSE explained. We explain how.
How to claim compensation
You can seek compensation from a payday lender if the loan was unaffordable, even if you have finished paying it off.
If you believe you are entitled to compensation, you should follow these DebtCamel steps to find out how to make a claim.
1. Check if you sold the loan incorrectly
Before a lender gives you a loan, they must check whether you are able to repay it.
Collect thousands of damages and refunds
CUSTOMERS have been misinformed, mis-sold and abused in a number of different industries.
If you are hit, you could owe thousands of pounds in interest or fees, or even compensation for mistreatment from a lender.
Check out our guides to claiming cash back on the following issues:
For a payday loan to be affordable, you need to be able to pay it off the next month as well as pay your other bills and debts.
The loan was unaffordable if:
- you often renewed loans or borrowed again soon after repaying a loan;
- your loans from a lender increased in volume;
- some reimbursements were late; or
- the loan was a big part of your income.
Ask the lender for a copy of your loan details, such as when you took out it and how much interest you paid.
Compare it to your bank statements from the time you took it out and see if you could have paid off the loan after paying your bills.
2. Make a complaint
There are websites that will help you submit your complaint to the lender, but be aware that if you are successful, they will take part of your compensation.
DebtHacker.co.uk is a completely free tool that will help you in the same process.
If you prefer to do it yourself, you should write a letter or email citing “unaffordable loans” and request a full refund of the interest and fees you paid, plus the 8% interest on the loan. ombudsman in addition.
Also request that the loan be removed from your credit report.
You can complain even if the lender has entered into administrative proceedings.
3. Contact the Mediator
If you have not heard from them after eight weeks, you should bring the matter to the Financial mediator.
You should also contact them if your complaint is dismissed, the repayment is too low, or if they refuse to consider loans that are over six years old and have been sold to a debt collector.
But be aware that you usually can’t complain to the ombudsman when the business has been foreclosed.
Last week, Martin Lewis warned families using prepaid cards that they often come with expensive and unnecessary fees.
The money guru also explained how couples can get up to Â£ 340 in free cash from banks.
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