How to complain about your payday lender?

As your payday loan is expected to be cleared by your next pay day, there would appear to be a straight forward agreement in place between the consumer and the lender. Sometimes (and too often with payday loans) things do go wrong and the parties fall out. If you believe the lender has made a mistake and won’t put things right to your satisfaction, you will have the option to complain to the lender and elsewhere.

The lender will have a ‘Good Practice Charter’ in place and they will also follow the rules laid down by the Financial Conduct Authority (FCA). This clarifies that the lender should have checked your application carefully before agreeing to lend the money. They should realistically expect the individual to be able to repay their debt and on time.

Where a payday lender doesn’t follow the rules, you can make a complaint. If you do not accept their response or they fail to complete your complaint investigation, to your satisfaction, within 8 weeks, you can complain to the Financial Ombudsman Service.

The Financial Conduct Authority does not investigate complaints by an individual, but they will suggest the following procedures;

  • Contact the firm direct
  • Make the complaint yourself
  • Contact the Financial Ombudsman Service
  • Where not concluded to your satisfaction - Take your lender to court
  • How to make your complaint

The Financial Conduct Authority is able to show you the necessary steps should you wish to complain about a payday lender.[1]

The Financial Conduct Authority has a complete section on their website  which explains all about complaints and compensation, with specific articles related to;[2]

This includes how you can take your complaint to the Financial Ombudsman Service.[3]

easy steps to making your complaint

You need to know what you can complain about and then how to complain. This information will guide you through the process.

what you can complain about

Citizens Advice have a collection of useful pages which explain what you can complain about in your dealings with a payday lender, and then how to go about bringing your complaint. Click here to visit them.  

you can complain when

  • The lender didn’t show you exactly what it would cost you to repay the debt
  • They didn’t make their fees or charges clear
  • The lender should have told you when your loan should be repaid
  • They should verify your circumstances to check that you can repay the debt by confirming:
    1: Your age
    2: Employment status
    3: Income
    4: Regular expenses
    5: ID
    6: Financial history
    7: Health

The lender should also:

  • Clarify that a payday loan is short term, not long term
  • How to complain
  • Detail how a CPA (Continuous payment authority) actually works in practice
  • Detail risk warnings for late payments in adverts, text messages and emails

You can complain about problems paying off your debt:

  • The lender must deal sympathetically and with a positive approach
  • Did they suggest they could freeze interest and charges if you became unable to make the repayment?
  • Did they list free debt advice options? Link to debt advice page
  • Did the lender add pressure for you to extend the loan?
  • Were the risks of extending the loan discussed properly?
  • Did you receive accurate costs for extending the loan?
  • Could you realistically afford to pay back the loan?

Your complaint can also detail how your family life was affected when you couldn’t repay the debt and whether the debt (and your other debts) has reached beyond the levels that you can control.

contact the firm direct

The first step is always to complain to your payday loan company, direct.

You should check the terms and conditions of your payday loan to find out how your payday lender will accept a complaint. Some will accept an email from you, but others will require a written letter, posted (as a recorded or signed for delivery) through the general post office system.

Your lender is best placed to put things right, when you point out the error of their actions.

Ensure that you have a record of all emails, letters and telephone calls between you and the lender. List the date and the time; the person you have spoken to and notes about the conversation that took place. The lender will tell you if the conversation (when using the telephone) has been recorded.

make the first complaint yourself

Claims companies that advertise in the press, online and on television, will offer to take over the complaint on your behalf and they may offer you the opportunity to carry out this service for free, but they will require a substantial payment (20 to 40% of the compensation) as they charge for completing the task successfully for you.

It is better to make the complaint yourself, at least during the initial stages. Where you find that your lender will not take your issues seriously or resolve them to your satisfaction, you may wish to turn to a claims company or use one of the free services offered by Citizens Advice[4], or the Financial Ombudsman Service.[5] 

contact the financial ombudsman service

This free and independent service, designed to settle disputes between any of the financial services companies that operate across the UK - and a customer.

The Financial Ombudsman Service (FOS) will accept your complaint officially and then ask the payday lender to explain their point of view.

You can telephone the FOS on a free-phone telephone number to give you the opportunity to discuss your complaint with someone within their complaints department. This will help you determine if you have an opportunity to register your complaint as in some instances, you may be wrong and have no chance of a complaint succeeding. They will record your telephone call, not to use for or against you later, but for monitoring and training their employees.

The FOS will consider all notes and information supplied by both sides of the complaint and then make a decision whether to uphold your complaint or side with the payday lender.

Conveniently, you do not have to design your own letter to complain to the FOS. When you click through to their How to Complain website page you can download a letter in either Word format, to complete on your computer and then print/email, or print off a PDF version of the letter so you can write by hand as you fill in the blanks.

Download Letter:

The complaint letter is designed to address all of the matters that will help the FOS take your case to the lender. It is planned to make sure that you enter all of the necessary information required.

The letters are available in a variety of languages and in alternative formats including Braille, large print, BSL (British sign language) and audiotape to give more people the opportunity to be able to complain where necessary and not be constricted by the methods of lodging the complaint.

The FOS website also offers you a range of frequently asked questions,  which may include the very question and answer you are looking for. Click here to visit that page.

take your lender to court

Where you choose not to accept a decision from the Financial Ombudsman Service, and you are sure that you have not made use of any independent complaint schemes, you can take the lender to court, to argue your case.

Where the amount of money involved is quite small (up to a few hundred pounds) you will probably deal with a County Court in England, Wales and Northern Ireland or the Sheriff courts in Scotland.

You may be able to choose a legal adviser on a No-win, No-fee  appointment[6], where your legal representation is free. Where you win, the legal adviser’s fees will be claimed from the lender. If you lose, you may have court fees to pay, but not for your legal advice, but, be extra careful in checking the offer from the no- win, no-fee business and to clarify any and all potential costs in writing.

Should your demand for compensation become substantial, the matter may be taken to a High Court.

Please note; when you take your complaint to court, there is no guarantee that you will win.

REFRENCES how to make your complaint to the payday lender

Begin by writing to your lender. Head your letter with the title Complaint so they know exactly how to understand and treat your letter.

Write clearly, without any waffle or small talk, and include the names of any people and the dates on which you spoke to them.

You should tell the lender how you would like them to deal with the matter and how it should be resolved, even though they may not agree.

All lenders will have an agreed set of policies and procedures of how to handle your complaint. They will be clear, well defined and easily explainable to the Financial Conduct Authority.

The majority of complaints can be dealt with immediately to the satisfaction of all parties, but where the payday lender is unable to resolve your complaint to your specific satisfaction by the end of the working day, (the day after they have received your complaint,) they are obliged by law, to provide you with a written acknowledgement that your complaint is currently under consideration.

They are obliged to keep you informed about their progress as they deal with your complaint and have up to 8 weeks to issue a final response to you. This will include an explanation of why they have agreed with your complaint or not.

They will tell you that you can continue your complaint on to the Financial Ombudsman Service. This usually occurs when you have completely exhausted the internal complaints procedure of the payday loan company that you are involved with.

Where the payday loan company cannot make an agreement with you to resolve the issue, they will issue a letter which is called a final deadlock, telling you their opinion of the outcome and confirming that they cannot resolve the issue with you.


Where you have a sensible complaint, do not give up easily or become bullied by the lender. The best endeavours will bring the most favourable results.




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Writen By:

Jim Cook

Jim cook has been in the financial sector for over 10 years. Specialising in the payday loan sector.

Published in Loan Issues

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