The Dark Side of Money: Mis-sold Loans
When you are struggling with money, the easiest way to help your situation is… More money. But unless you have a money tree in your back garden, the choice most people make is taking out a loan. Which is fantastic when it lands in your account, but not so fantastic when it has to be paid back.
Types of Loans
Payday and short-term loans, guarantor loans, doorstep loans and high cost loans are all common place; and are all easy to apply for. But they can easily be abused, and the client (you) can slip through the cracks; borrowing again and again, with no real way to pay them back. Place some late payment fees and interest on top, and before you know it you are fast falling into a hole you are unable to climb out from.
Payday loans are designed to last you from one payday to the next. They are best suited for help with the unexpected bill, or emergency funds you require over a short timeframe. Guarantor loans are for those who are unable to obtain a loan by themselves, due to low or poor credit. Doorstep loans are just that; loans sold to you on your doorstep; usually smaller financial amounts than guarantor loans, paid back in weekly increments. High cost loans are for those who also have poor or low credit. You are more likely to get a loan through these companies, but will be charged a hefty fee for the privilege, as you are considered ‘high risk’.
How to Claim
Depending on which loan you had, when, and how many, you may be eligible to make a claim. This could be for any payments made over your loan amount, like interest and fees; with claims worth anything from just a few pounds, to thousands of pounds. Loans taken out before the 6th April 2007 will not be taken into consideration, but any loans taken out after this date are potentially eligible.
As with bank charges, you can attempt to claim in one of two ways. You could submit a complaint directly with the lender; using a template of your choice from online to help you draft your letter. If you are unsuccessful, you can choose to escalate your complaint to the FOS (Financial Ombudsman Services).
Claims Management Companies
If this sounds intimidating, time consuming or simply too confusing, you may wish to use a CMC (Claims Management Company). They will be able to take on your complaint from start to finish, and answer any questions you may have about the process. They literally manage your claim. Most companies, such as Allegiant Finance Services, work on a no win no fee, and are clear and upfront about any costs you may incur, so there are no hidden charges.
Be aware; if you have already made an official complaint to your lender personally and received a final response letter or any compensation, you are unlikely to be eligible to use a CMC. This is because any settlement you have agreed to is taken in full and final settlement of the dispute, and not available to revisit at a later date.
