It’s still possible to make a mis-selling complaint after a payday loan firm has gone bust, however, leaving complaining until then will significantly reduce what you’re likely to get back…
How much you’ll get all depends on how much money is leftover and how many creditors this has to be shared between. Unfortunately, customers of payday lenders are at the back of the queue of people owed, being counted as ‘unsecured creditors’. This means they’re unlikely to see all the money they’re due and could be waiting months (such as Wonga customers who only got 4.3% of the compensation they were owed).
Even those people who get their claims in just before a company goes bust may not get any more than those who filed theirs afterwards – it all depends on the administrator and the circumstances.
So, if you do believe you were mis-sold a payday loan by a company that is still active, don’t wait to lodge a complaint. Do it now. Time really is of the essence in this situation.
Payday lenders aren’t covered by the Financial Services Compensation Scheme, the consumers’ safety net for when most finance firms fail. So when they go bust, the size of the payouts is down to how much money the administrators can squeeze out of the business and how many creditors are lining up.
In terms of speed, you won’t necessarily be better off using a claims management company.
If your payday lender goes bust and you’re paying back a loan, you’re likely to have to continue paying until the administrator tells you otherwise. In some cases, what you’re owed for being mis-sold could be wiped from the ongoing loan. You could be due the interest and charges and interest on all of that too.
As with the first letter to the payday lender, which you could always copy and paste, don’t feel you have to be formal. Explain the point clearly, concisely and honestly, in your own words, just as if you were explaining the situation to a friend.
This content was originally published here.