YOU MAY HAVE A CLAIM FOR COMPENSATION
Claim a Refund for Credit Card Credit
If you’ve previously had a credit card with a high credit limit, or were given a sensible limit at the start that was subsequently increased, causing you to struggle with repayments, you may be entitled to a refund.
What are credit card loan refunds?
Just like a personal loan, you are borrowing money when using a credit card. The credit card company is providing you with credit, up to an agreed limit based on your personal financial situation. If the lender first gave you a sensible limit but then increased it causing you to get into more debt, then you may be able to claim a refund. We are not talking about claiming a refund for goods or services purchased on your credit card, this is completely different and comes under Section 75 law refunds.
How to check you had credit card
You can quickly check to see if you had a credit card account by following these simple steps.
Check your email
Search for the names of crefit card companies you think you may have used in the past. If you find any emails, search for keywords like ‘credit’, ‘loan’ and‘ statement’. If the company is emailing you statements of your account it’s proof you have a credit account with them.
Search your credit record
Use this free credit check tool to check your credit history for the last 6 years. See if any credit was ‘repaid’. Remember you can still get compensation from loans older than 6 years and even if the loan hasn’t been repaid in full, although it’s likely to be much less.
Check your bank statements
Looking through your old statements is often an easy way to find out if you had a loan. Don’t worry if you no longer have them, due to GDPR regulations you can request a copy by submitting a Subject Access Request (SAR) to the bank. Once you have them look for money going in and then money going out each month (a typical pattern for loan or credit facility).
The credit card companies we can claim against
These are the current lenders we are accepting claims for. When you apply you can also select multiple lenders if you had credit or loan from more than one company.
This credit card company offers a range of credit cards from £250 to £1,200 credit limit with a maximum APR of 59.90%.
Visit lender page ›
This credit card company owned by NewDay Ltd. provides credit at 37.9% APR variable to those previously rejected by lenders.
Visit lender page ›
Capital One is one of the top 10 credit card providers across the US and UK. If you’ve had a credit card with them, you might have a claim.
Visit lender page ›
The brand provides a range of different credit card offerings and more recently has branched out to issue personal loans.
Visit lender page ›
Checking you have a valid claim
If you can relate to any of the below you may have claim:
Fees or charges not clear?
When you took out the credit card were the charges and associated fees made absolutely clear to you?
Unable to pay bills?
Your payments for credit were so large that you struggled to pay for your monthly essentials like bills or mortgage payments.
Rolling over credit?
You had to take out further credit to pay the initial one back, supporting unaffordability.
Lenders taking automatic payments?
Did the credit card company take automatic payments from your account without telling you that put you in financial difficulty to pay other essentials.
Encouraged to borrow further?
Did the credit card company advertise ‘good customer’ offers that promoted regular use and the ability to get better deals the more you borrow?
Despite clearly not being able to pay the first loan back, did your credit lender continue to offer more through debt consolidation?
If you can relate to any of these points you may have claim and should complete our 5 minute form now:
The Legal View
“Rules imposed by the Financial Conduct Authority mean any firm offering credit has an obligation to check your financial situation to make sure you could afford the credit they were providing, before giving it to you.”
The Financial Ombudsman Service (FOS) reviews complaints made about credit card companies by checking to see if they completed the necessary affordability checks before lending money. For the first half of the business year 2021 the uphold rate for one of the lenders, Vanquis, was 43% ave. which means roughly 4 out of 10 claims referred to the Ombudsman, ruled in favour of the claimant. This figure is based on claims sent to the Ombudsman, however the majority of claims are settled directly with the lender, before being referred. This is because the lender is charged a fee by the FOS for every referred case, so it is often in their financial interest to settle directly with the claimant.
The legal bit
The basis of any claim is split into two arguments. First, did the lender properly assess your 'creditworthiness' before lending to you know as 'unaffordable lending'? Second, how did the lender treat you known as 'unfair treatment'.
Unaffordable Lending - “Assessing Creditworthiness”
The FCA sets out in Chapter 5 of the Consumer Credit sourcebook (CONC) that before anyone enters into a regulated credit agreement, they must first be assessed for ‘creditworthiness’. This ‘assessment’ must be repeated for any ‘significant’ increase in credit or credit limit given in the future (CONC 5.2A.4 ). The FCA does not prescribe what checks should be made by firms, it just says checks should be ‘reasonable’ and ‘proportionate’ to the type and amount of credit, it’s cost and the customer’s financial position (CONC 5.2.3G ); this is called the firm’s “affordability risk”.
What checks the firm should carry out are covered in CONC 5.2A.20R (Scope, extent and proportionality of assessment). The FCA does state that creditworthiness checks should take into account (where appropriate) information from the customer and credit reference agency (CONC 5.2A.7R )
A firm must consider the customer’s ability to make repayments from:
- Income from savings
- Savings or other assets indicated to be used to repay the debt
- Without having to borrow more to meet repayments
- Without failing to make other payments contractual obliged to meet
- Without the repayments having a significant adverse impact on the customer’s financial situation.
The firm must take reasonable steps to determine the amount, or make a reasonable estimate, of the customer’s current income and reasonably foresee a likely drop in future income. For the purpose of considering the customer’s income under CONC 5.2A.15R it is not generally sufficient to rely solely on a statement of current income made by the customer without independent evidence (for example, in the form of information supplied by a credit reference agency or documentation of a third party supplied by the third party or by the customer).
Non-discretionary expenditure referred to in CONC 5.2A.17R includes payments needed to meet priority debts and other essential living expenses and other expenditure which it is hard to reduce to maintain a basic quality of life. It also includes payments the customer has a contractual or statutory obligation to make, such as payment obligations arising under a credit agreement or a mortgage contract.
Use of Credit
The FCA states (CONC 5.2A.21G ) that firms ‘may’ have ask how the customer intends to use the credit. Debt consolidation loans are allowed, but this shows existing financial difficulty which should spark further creditworthiness checkers by lender. The FOS has ruled in the past in favour of claimants where this information was provided and not acted upon.
If the lender encouraged you to borrow further with ‘good customer’ offers or didn’t inform you of the risks of borrowing more or didn’t check your affordability to increase your limit, you may have a claim.
Unfair Treatment - “How the lender acted”
The list below sets out additional grounds to complain if you felt the lender retreated you unfairly.
If you felt pressured to extend your loan or if you felt the lender didn’t listen to you or deal with you “sympathetically and positively”.
The lender didn’t freeze charges or you were unable to make payments under a reasonable repayment plan.
The lender should have provided you with a Key Facts Document that details in simple terms all the information you needed to know before signing any agreement, if they didn’t you could have a claim.
Use of Debt Collection
If your lender resorted to using a debt collection agency without first talking to you and trying to create a repayment plan.
No Late Payments Warning
The lender didn’t warn you in their advertising or personal communication what would happen if you missed repayments.
No CPA Warning
The Continuous Payment Authority (CPA) didn’t give you prior warning that it was going to take money from your account.
The evidence you need
All you have to do is show that your credit card company acted ‘irresponsibly’ in providing you with credit that could not be repaid without ‘undue difficulty’. Get a list of all your credit card companies that you think qualify and then write down how much you earned each week or month. After that, detail all your expenses like rent and utility bills (electricity, gas and water) as well as council tax, broadband, mobile phone, car and home insurance, grocery, clothing, childcare, other debts and outgoings. Finally, write a letter to each lender including this information explaining that your loan was unaffordable and ask for a refund.
But don’t worry if this sounds daunting, we do all this for you. Claim online by filling out our form and let our experienced claims team handle the headache and hassle for you.
Did you know?
On average, the uphold rate for credit card redress claims is 38%
FOS Quarterly Complaints Data (Q2 2020/21)
How successful are claims?
The average uphold rate for credit card redress claims is currently 38%. Q1 2021 data from the FOS show ‘Credit Cards’ as being the second highest complained about service after ‘Current Accounts’ with 4039* new cases. This shows that credit card redress claims are an issue. The reality is many claims don’t get as far as being reviewed by the FOS and are settled with the claimant directly by the lender. Each case is different, however, so if you’ve had a short term loan in the past, it’s best to check your claim now.
How much can I get?
The law says how much you get is dependent on what your financial situation would be now if you had been treated ‘fairly’ and ‘responsibly’ in the first place by the credit card company. Claims range from £100’s to £1000’s and are calculated by working out all the interest, fees and charges you paid and then adding a statutory 8% interest rate for each year you had the credit. So, for example, if you had a £1,000 refund in fee, charges and interest you would also get £1,000 x 8% = £80 x 4 years = £320. That means in total including compensation you would get £1,320.
What else can I claim for?
If you have had other unaffordable credit in the form of payday loans, short term loans, or guarantor loans or had unaffordable credit from doorstep lenders, check out these specific pages on our website. We check over 30 lenders from all industries in one simple form you can complete in just 5 minutes.
How far back can I claim?
The Financial Ombudsman Service states you have 6 years after the loan was issued or 3 years from ‘when you were first made aware’ you could claim, whichever is longer. This means you have a good chance of claiming loans older than 6 years if you weren’t aware you could claim. We have some claims dating back to 2010, but don’t delay, start your claim today.
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Typical claim payout
The law says how much you get is dependent on what your financial situation would be now if you had been treated ‘fairly’ and ‘responsibly’ in the first place by the credit card company. Claims range from £100’s to £1000’s and are calculated by working out all the interest, fees and charges you paid and then adding a statutory 8% interest rate for each year you had the loan.
“If you had a £1,000 refund in fee, charges and interest you would also get £1,000 x 8% = £80 x 4 years = £320. That means in total including compensation you would get £1,320”
Don’t Delay. Check Now.
Don’t miss out on £100’s or even £1,000’s in compensation you could be entitled to. Checking only takes 5 minutes, so why not do it now?