The Financial Ombudsman Service has recently revealed in new statistics that complaints against payday lending providers across the country have risen to a staggering five-year high.

How many complaints have been filed?

The industry watchdog has said that a whopping 40,000 new complaints against payday lenders were brought against them last year. This is a dramatic rise, representing an increase of 130% (17,000 complaints were made in the year previously).

The industry body, the Consumer Finance Association (CFA) has said that the majority of these filed complaints had dated back to a number of years.

What were the complaints about?

In terms of what customers complained about, the CFA has noted that overwhelmingly, they were to do with issues of affordability.

For example, some borrowers took out as many as 20 to 30 loans in a very short period of time. In some cases, the Financial Ombudsman Service has dealt with customers who took out 100 payday loans at once. This was mostly used to pay for household bills, or to pay off existing loans.

Which company was the most complained about?

It has also been revealed exactly which payday lenders were the most complained about in 2018. The QuickQuid owner Casheuronet topped the list, with over 10,409 new cases last year. Over 63 per cent of these complaints ended up being upheld in favour of the borrower.

The other most complained about payday lenders included WDFC, who is the owner of the now defunct payday lending provider Wonga. Over 6,876 complaints were made against them, and 68 per cent of these were in the customers favour.

Lending Stream owner Gain Credit came next with over 5,414 complaints in 2018, with 61 per cent of these upheld, and then Instant Cash Loans (which trades under the company name The Money Shop) with 3,241 complaints in 2018, and 43 per cent held in the customers favour.

Curo Transatlantic Limited also made the list of most complained about companies (which traded under Wage Day Advance and Juo Loans went into administration earlier this year) with 2,797 complaints filed by customers, and nearly half (49 per cent) of these were upheld.

Rise in complaints despite price cap

Unfortunately, despite the industry regulator the Financial Conduct Authority implementing a price cap on payday loans charges in 2015, in order to better protect customers, complaints have still risen.

How can I claim a refund from payday lenders?

Have you been mis-sold a loan by a payday lender, and would like to make a complaint against them? It is possible for you to be able to claim compensation if the loan given to you was unaffordable, and this remains the case even if you have now paid off the loan in full.

But what steps should you take if you believe you may be owed compensation?  Follow our tips below in this step-by-step guide:

  • Make sure you were mis-sold a loan: you should always check before making a complaint against a payday lender that you were definitely mis-sold the loan in the first place. But how? In order for a payday loan to be deemed unaffordable, it needs to have been a significant part of your income, your loans were increasing in size, you had late repayments or you often borrowed again soon after repaying.
  • Get a copy of your loan details: you should get in contact with the payday lender in question to obtain a copy of your loan details. This will be needed when you file a complaint, and it can help you to figure out if the loan was unaffordable.
  • Make a complaint: whilst there exists claims management companies who can help you submit your complaint to a payday lender, it is worth remembering that if your claim is successful, they will take a percentage of your compensation. It is better to use a letter template that you can find for free online on a number of debt management websites.