I've been charged hidden fees on a payday loan, can I get a refund?
Risk warnings on payday loan promotions
The Financial Conduct Authority (FCA) is the regulator responsible for short-term lending.
It states that firms offering 'high-cost short-term' credit (payday loans) must include prominent risk warnings on all financial promotions.
Unfair terms
Your rights under the Consumer Rights Act make it easier to challenge hidden fees and charges.
The CRA states that the main elements of any contract - including the price and any other charges - must be brought to your attention.
All contracts must clearly set out information about prices and charges in a way that is:
- Transparent In plain and intelligible language and, if written, it must be legible
- Prominent Brought to the consumer's attention in such a way that the average customer (who is 'well-informed, observant and circumspect') would be aware of the term.
Therefore if the unexpected fees weren’t explained to you when you took out the loan, weren’t available on the lender’s website or weren’t clearly included in the paperwork you received, you can challenge them as an unfair term under the CRA.
Challenge unexpected charges
If you’re charged unexpected fees that weren’t explained to you when you took out the loan, weren’t available on the lender’s website or weren’t included in the paperwork you received, write to the lender to challenge the charges.
If you’re not happy with the response, issue a formal complaint in writing to your lender.
Complain to the FOS
If necessary, you can take your case to the Financial Ombudsman Service (FOS).
To refer the problem to the FOS, you should have been trying to seek resolution with the company for eight weeks.
After eight weeks you're still not satisfied with how the company has dealt with your complaint, then complain to the FOS.