YOU MAY HAVE A CLAIM FOR COMPENSATION

Claim a Doorstep Loan Refund

Doorstep loans bring cash to your door, but similar to payday loans they also charge a high amount of interest. The main lenders include Loans At Home, Provident and Morses Club. If you’ve had a doorstep loan in the past that you couldn’t afford to repay, you may have a claim, so check now.

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What are doorstep loans?

Doorstep loans are also known as home collection loans and home credit loans. Unlike other forms of borrowing, as the name suggests doorstep loans bring cash to your door. Your loan is discussed face-to-face in your own home allowing those with poor credit history to explain their financial situation in person. Face-to-face assessments can allow some people with poor credit to receive loans because agents can discuss your financial situation in person rather than relying on a computer algorithm. Loan collections are made in person by someone visiting your home. Loans are often for smaller amounts than standard loans, but you are still charged a high amount of interest for borrowing.

Like other loan companies, doorstep loan lenders have to be authorised by the Financial Conduct Authority (FCA), however this does not apply to the agents that visit your home as these fall under the authorisation of the lender that they represent.

In this section

› Doorstep Loans

› How to check you had a doorstep loan

› The companies you can claim against

› Checking you have a valid claim

› The legal bit

› The evidence you need

› Common questions

› Typical claim payout

How to check you had a doorstep loan

You can quickly check to see if you had a doorstep loan by following these simple steps.

Check your email

Search for the names of doorstep loan 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).

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The doorstep loan 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.

Loans At Home

This doorstep lender offers loans from £100 to £600 over a repayment term of 14 – 34 weeks. The maximum APR is 466.40%.

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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 a doorstep loan were the charges and associated fees made absolutely clear to you?

Unable to pay bills?

Your payments for the doorstep loan 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 a further loan to pay the initial one back, supporting unaffordability.

Lenders taking automatic payments?

Did the doorstep loan 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 doorstep loan company advertise ‘good customer’ offers that promoted regular use and the ability to get better deals the more you borrow?

Unfair lending

Despite clearly not being able to pay the first loan back, did your doorstep 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:

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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.”

Key Fact

The Financial Ombudsman Service (FOS) reviews complaints made about doorstep loan 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 Provident and Morses Club was 72% ave. which is one of the highest uphold rates in the industry.

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 )

Repayment Checks

A firm must consider the customer’s ability to make repayments from:

Income
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.

Assessing Income

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).

Assessing Expenditure

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.

Extended Credit

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.

Fair treatment

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”.

Repayment Plan

The lender didn’t freeze charges or you were unable to make payments under a reasonable repayment plan.

Key Facts

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 doorstep loan company acted ‘irresponsibly’ in providing you with a loan that could not be repaid without ‘undue difficulty’. Get a list of all your doorstep lenders 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.

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Did you know?

On average, the uphold rate for doorstep loan redress claims is 75%.

FOS Quarterly Complaints Data (Q2 2021/22)

Common questions

How successful are claims?

The average uphold rate for doorstep loans redress claims is currently 75%. This shows that the majority of all doorstep loan claims that end up being reviewed by the FOS are successful. 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 doorstep loan 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 credit cards, 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.

*based on FOS Business Complaints Data H1 2021 from Morses Club PLC and S.D. Taylor Limited.

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 loan 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.

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Example Calculation

“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?

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