How A Claim Works Step By Step
An unaffordable lending claim follows the same structure whether you handle it yourself or use a regulated claim partner. There are five main stages: eligibility check, evidence gathering, complaint to the lender, lender response, and (if needed) escalation to the Financial Ombudsman. This page walks through each stage, with realistic timeframes and what happens at each point.
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Stage 1: eligibility check
Before anything else, a quick check on whether your situation is the kind of thing the rules cover:
- Was the credit a regulated consumer credit product — card, loan, overdraft, catalogue, doorstep, guarantor, payday?
- Was the lender FCA-authorised at the time?
- Are you within the time limits — six years from the lending, or three years from awareness?
- Were there factual indicators that the credit was unaffordable to repay sustainably?
Do I have an unaffordable lending claim?.
Stage 2: evidence gathering
The next step is to assemble what you and the lender know about the borrowing. This typically takes a few weeks and involves:
- A Subject Access Request to the lender — produces application data, the credit search at the time, the affordability assessment outputs, full account history and any internal notes. Free, with a one-month response window (extendable to three).
- Bank statements from the period — your actual income, your actual outgoings, any other credit being repaid at the time.
- A statutory credit report — free from each of the three main UK credit reference agencies, showing what your file looked like.
- Your own narrative — a short factual account of what was happening in your life and finances at the time.
Can I claim without old loan paperwork?.
Stage 3: complaint to the lender
A formal written complaint goes to the lender. There is no fixed format, but a strong complaint will:
- Identify the credit being complained about (account, loan, dates).
- State why the lending was unaffordable, with reference to the borrower’s actual position at the time.
- Reference what proper checks would have shown, supported by the bank statements and credit file.
- Identify any specific events — credit limit increases, refinances, top-ups — that the complaint covers.
- Say what redress is being sought — refund of interest and charges, 8% statutory interest, removal of adverse credit-file entries, balance adjustment if applicable.
Once the complaint is received, the lender has up to eight weeks to issue a final response under DISP. They may issue it sooner.
Stage 4: lender response
The lender’s final response will typically:
- Uphold the complaint — accepting the lending was unaffordable and offering redress.
- Partially uphold — accepting some of the lending was unaffordable (often later loans in a sequence, or later credit limit increases) and offering proportionate redress.
- Reject — finding the checks were adequate and the lending was affordable.
If you accept an offer in full and final settlement, the matter ends there. If you reject, the next stage is FOS.
Stage 5: escalation to the Financial Ombudsman
If the lender’s final response is unsatisfactory, you have six months from the date of that response to refer the complaint to the Financial Ombudsman Service. FOS is free for consumers. The process at FOS:
- A case handler is allocated and reviews the complaint, the lender’s file and your evidence.
- An investigator issues a non-binding view (sometimes called an “adjudication”). Either side can accept it or push for an Ombudsman decision.
- If either side rejects the investigator’s view, an Ombudsman issues a final decision. If you accept it, it is binding on the lender.
How the Financial Ombudsman handles unaffordable lending complaints.
Stage 6: redress
Where a complaint succeeds, the typical redress includes:
- A refund of interest, fees and charges from the point at which the lending was unaffordable.
- 8% simple statutory interest on top, calculated from the date each charge was paid.
- Removal of adverse credit-file entries linked to the unaffordable lending.
- Where there is an outstanding balance, the refund is normally applied against it first; any surplus is paid out.
How long the whole process takes
How long does an unaffordable lending claim take?.
Doing it yourself or using a claim partner
Related guides
- Do I have an unaffordable lending claim?
- What evidence do I need?
- How long does an unaffordable lending claim take?
- How the Financial Ombudsman handles unaffordable lending complaints
- How redress is calculated
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