Unaffordable/Irresponsible Lending

If you’ve taken out car finance, a loan, a credit card or a store card or you were encouraged to apply for further borrowing, then you could be owed compensation.

Unaffordable Lending 27

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About Your Car Finance, Credit Card, Overdrafts, Store Card or Loan

Have you ever had car finance, a credit card, a overdraft, a loan or a store card?*

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What Is Unaffordable or Irresponsible Lending?

If you’ve taken out a loan, credit card, or store card, your credit limit has been increased, or you were encouraged to apply for further borrowing, you could be owed compensation.

Lenders are not just expected, but legally required, to make appropriate checks, in accordance with industry practice and guidelines, to ensure that any borrowing you take will be affordable and not place you in financial hardship. If you’ve struggled financially as a result of making your monthly repayments or have only managed to usually pay the minimum repayment amount, then the credit may have been unaffordable. When you’re unable to complete repayments, your credit score suffers. By making a claim for unaffordable lending, a successful claim compensates you for the losses and could remove any negative information from your credit history.

You may be eligible to claim if any of these apply:

  • No affordability checks took place
  • You have been unable to pay your bills or mortgage payments
  • You took out an additional loan to pay the first one back
  • The lender didn’t clearly explain the risks involved with further borrowing
  • The fees and charges were not made clear
  • You were encouraged to borrow more money for a better deal
  • The lender did not take into account personal circumstances
  • Debt consolidation was offered by your lender with additional credit
  • The lender kept increasing your credit limit
  • Your balance was close to (or exceeded) your credit limit
  • You are/were in a cycle of debt

How Does Affordability Work?

Before you’re given a credit card, store card or loan, the lender should look at your income and regular expenses. This information and details of other debts you may have are used to determine if you can afford the new monthly repayment.

As a case in point, guarantor loans need the affordability checked for both the primary and guarantor borrowers. You can afford the loan if the agreement proves to be financially manageable. If not, the lender should refuse to lend to you.

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Why you should not delay

The right to reclaim money owed to you may have a time limit set in law. Even with no time limit attached, the sooner you start your reclaim process, the sooner you will receive a refund or the compensation owed to you.

We offer a free eligibility checker for UK residents where we carefully check and potentially reclaim for you. If you ask us to reclaim money for you, this is on a no-win no-fee basis.

No upfront payments are necessary and our legal costs are met as part of the claim.