A FREE tool that may assist you to reclaim hundreds of pounds of compensation from pay day loan companies has launched.
Millions could be owed a refund after short-term loan firms – which can replenish to six,000 per cent APR – gave out unaffordable loans, according to the City watchdog.
But a new tool by MoneySavingExpert can help you complain straight to a lender if you've ever endured an online payday loan or if you're still paying one-time.
The average pay-out per claim made while using tool is lb400, according to the consumer site
Payday loan firms should check your finances to see if you can afford the loan, provide you with clear information about how to pay for it back and just allow you to remove one loan at any given time.
If they didn't do this stuff, then you may cover the cost of an effective claim.
Customers may also be capable of making a claim if they struggled to pay other bills, for example council tax or rent, or went without food to repay loans, as well as those who ended up being charged late payment fees.
The Financial Ombudsman Service said it received 29,500 gripes about credit products between January and June 2023 – an increase of 80 percent when compared to six months before.
The online for free tool helps you submit a complaint while using online complaints service Resolver.
It will ask you which ones payday lender mis-sold you the loan and then you click "Start Your Reclaim".
You will be come to the Resolver website and asked which pay day loans issue best describes your problem, which range from affordability to credit score, fraud or debt recovery.
You will have to describe your issue in more detail by selecting a more specific trouble with the loan.
The tool then lets you know your consumer rights, before you decide to click to make a case.
You will need to fill out personal information, such as your date of birth, what went down, how it affected you, the date from the issue and what you would like out of your pay day loan firm – for example, an apology or refund.
You may then review and send off your claim.
The tool is comparable to one launched by DebtHacker in October, that also helps you raise a complaint straight to lenders.
Claims management companies supply the same service, but they will require a slice of the money repaid for you, whereas these web based tools are free.
If you don't want to use the online tool, you may make claims by letter to your lender.
MoneySavingExpert includes a draft template letter to help you make a complaint without needing to give away part of your compensation to a claims management service.
Once you make a complaint, your payday loan company should get in touch having a decision on your claim.
If you don't hear back in the firm within 8 weeks, or perhaps your claim is rejected, you are able to take your claim to the Financial Ombudsman Service.
If you apply the online tool, you'll automatically be prompted to contact the Ombudsman if you haven't heard back after eight weeks.
Complaints should be made to the Ombudsman within 6 months of the original claim being rejected or ignored.
The Debt Camel website also gives customers use of free template letters to submit claims.
In August, we revealed how pay day loan customers could be due millions back in compensation.
Firms happen to be warned through the Financial Conduct Authority about their practices following a sharp rise in the amount of complaints within the first half of this season.