Payday loans and short-term loans
Take control of your money
If you took out a payday loan, chances are, you will have provided the lender with your card details to set up a continuous payment authority or recurring payment.
You have the right to cancel recurring payments directly with your bank, without having to get the lenders’ permission. See recurring payments.
If the payday lender still takes money from your account after you have cancelled the recurring payment, you must complain to your bank and ask for an immediate refund.Source: FCA – your right to cancel
Look at the conditions under which you were offered the loan
Payday lenders are well known for offering quick and easy loans without assessing whether the borrower would be able to repay the loan. This constitutes irresponsible lending. See unfair relationships.
Payday lenders often promote rollovers where the borrower pays a substantial amount in order to get more time to repay the loan.
Complain to the payday lender
If the payday lender didn’t take the appropriate steps to ensure the loan is suitable for you and you were able to repay it, you can write a letter of complaint to the company. You need to do this before going to the FOS.
If the payday lender does not respond in 8 weeks or does not offer a satisfactory resolution to your complaint, you can escalate your complaint to the Financial Ombudsman. See how to complain for reference.Source: Govan
Set up an affordable repayment plan
Make an offer to repay the amount you borrow at a rate you can afford, in monthly installments. You may need to prepare an income and expenditure (budget) sheet. See budgeting for reference.
Payday loan cap
The cap came into force in January 2015 and has the following effect.