A payday loan is a short-term loan which is generally taken out to cover last minute or unplanned costs such as unexpected bills, reduction in income due to sickness, broken appliances or electricals etc. The reason for the name ‘payday loan’ is because the loan is generally meant to be an interim solution to get you by until your next pay day. The loan duration can range from 1-35 days with most lenders.
Payday loans can often come as a blessing when consumers are caught out with no one else to turn to. However, payday loans come at a cost! Most payday lenders have a representative APR of 1000% plus. There are also additional charges for missed payments and additional interest charges for late payments.
Some of the well-known payday loan providers are; Wonga, QuickQuid, Sunny, Lending Stream and Peachy.
How are Payday Loans Mis-sold?
Under the Consumer Credit Act 1974, lenders have a duty of care to provide responsible lending to consumers. Specifically, the lenders have to carry out an assessment of creditworthiness and affordability.
As such, payday loans can be mis-sold for the following reasons;
- A loan was provided to the consumer despite it being clear that the consumer was unable to make the required repayments without undue difficulty, whilst continuing to meet other debt repayment obligations and reasonable outgoings.
- Credit/affordability checks were not suitably carried out by the lender before granting the loan.
- Consumers were left in a worse financial position than they were in before obtaining the loan, because their income was significantly reduced (after repaying the loan and interest) and as such the consumers available funds for essential living expenses was little to none.
What should I do if I think I may have been mis-sold a payday loan?
Allay can provide you with a comprehensive service that deals with the process of being mis-sold a payday loan from start to finish, relieving you from the pressure of having to make the claim yourself.
We work on a no win, no fee* basis, so we only charge if we are successful in recovering money for you.
You will benefit from having a dedicated case handler who will take your claim through the entire journey. To get started with your claim, get in touch today by calling our specialist team on 0191 631 0823.Complete the form