In its simplest form, a Payday Loan involves a lender providing a small amount of finance to a borrower over a short period of time – usually, in the event of a short term problem which requires money to see you through until the end of the month (e.g. car repairs, household appliance needs replacing).

That being said, there remains an obligation upon all lenders to ensure that any monies being lent are able to be repaid by the borrower – they must be affordable.

Unfortunately, many firms did not ensure the affordability of their products and this led to their borrowers being trapped in a cycle of credit from which they were unable to escape.

As an example:

If a customer were to borrow £100 on the 20th of the month, with a view to repaying £120 on the 1st of the following month, the lender ought to have been ensuring that the client had the means to repay £120 on pay day by conducting a review of the income and expenditure of the individual.

The typical situation with these types of loan would be that the debtor may repay £120 on pay day, only to borrow £120 on the 15th of the month to then pay back £150 on the 1st of the following month.

Debtors frequently found themselves trapped in a cycle of credit with the amounts borrowed increasing (to cover the interest) and the date they needed the advance coming earlier in the month or even borrowing multiple times in the same month or from different lenders.

The typical indicators that your Pay Day Loan may have been mis-sold are:

  • Entering into a debt solution such as an IVA;
  • Borrowing from multiple Pay Day Lenders;
  • Rolling over payments;
  • Refinancing loans;
  • Missing payments to household bills or other loans;

If you believe you may have been mis-sold your Pay Day loan, our expert team will be happy to help.


This form collects information in order to arrange a call back from one of our experts. You can read our full privacy policy here.