Have you been treated unfairly by a lender? Here’s what you can do.

When you take out a loan, credit card or finance, you probably assume that the lender is playing by the rules: they’ve checked if you can afford it, they’ve been open about all the fees and charges involved, and they’ve been honest about whether it’s a suitable product for you. But, unfortunately, not all lenders act with such integrity. 

At Complex Law, we regularly see cases where lenders have approved credit without properly checking affordability, buried significant charges in the small print, or pressured borrowers into agreements they didn't fully understand. And when things go wrong – when borrowers fall behind on payments, face mounting fees, or see their credit scores damaged – it's the borrower who pays the price for the lender's failures.

How does unfair lending happen?

Unfair lending isn't always obvious. In many cases, borrowers only realise they were treated unfairly after the damage has already been done – when they're struggling with repayments, facing default notices, or finding it impossible to get credit elsewhere. But the problem often starts at the beginning of the relationship.

Inadequate affordability checks

Lenders are legally required to check whether you can afford the repayments on a loan or credit product before they approve your application. This should take into account a number of factors: your income, your other debts, and your monthly expenses – it shouldn’t just be a quick credit score check. And these checks should be repeated whenever a credit limit is raised or a new loan is taken out. If not, the original lending decision or subsequent increases may constitute unfair lending.

Unclear or hidden fees and charges

Lenders must provide transparent information about the costs involved in a loan or credit agreement to the borrower before they sign. If interest rates increase and additional fees or other charges are hidden away in the small print, this doesn’t count: in the eyes of the law, it may create what’s called an "unfair relationship". A related issue is lenders or brokers failing to disclose commission (which may be built into the cost of your loan), which can also render a credit agreement unfair.

Pressure selling and aggressive practices

Lenders and brokers are prohibited from pressuring you into taking out credit. That means typical “old-school” sales tactics, such as trying to talk you out of shopping around, pushing a more expensive loan when a cheaper option would suit you better, or urging you to sign quickly, are all breaches of their obligations – and could give you grounds for a claim.

Unfair treatment when you fall behind

Lenders are required to treat borrowers in arrears with forbearance: that means working with you to find a sustainable solution, not piling on default charges, making threatening calls, or passing your debt to a collections agency without first trying to help. If your lender responded to your financial difficulties by making them worse, you may have grounds for a claim.

What can you claim back from unfair lenders?

If you’ve been treated unfairly by a lender – for example, credit was approved without proper affordability checks – then you could be eligible for significant remedies. The exact outcome depends on the nature of the unfairness and the type of credit involved, but successful claims commonly result in one or more of the following:

• a full refund of the interest and fees charged on the unfair portion of the credit
• a full write-off of the remaining balance on the account 
• removal of credit markers for missed payments, defaults, or county court judgments
• compensation for distress and inconvenience

How does the claims process work?

Unfair lending claims follow a structured process, and it's important to get each stage right. Taking shortcuts or skipping steps can weaken your position or delay the outcome.

Step one: complain to the lender

Before taking any further action, you must file a complaint directly with the lender. This gives them the opportunity to investigate the issue, and in many cases, the matter can be resolved at this stage. The lender has eight weeks from the date it receives your complaint to issue a final response. If they don’t meet this deadline – or if they respond with a rejection of your claim, then you can move on to the next stage.

Step two: notify the Financial Ombudsman Service

The Financial Ombudsman Service is your first line of support if a lender isn’t cooperating. It’s an independent body that resolves disputes between consumers and financial services firms, and it has the legal authority to force lenders to pay refunds, write off balances, correct credit files, and pay compensation. However, if you’re not satisfied with a decision made by the FOS, you still have the right to pursue the matter independently.

Step three: if necessary, issue court proceedings

Claims based on an "unfair relationship" under Section 140A of the Consumer Credit Act 1974 are brought in the County Court. The court has wide powers to rewrite the terms of a credit agreement, order refunds, and reduce or eliminate outstanding balances. This route is typically more complex and costly, but for high-value claims, it may be the most effective option.

Important: don’t delay once you realise there’s an issue.

Once you suspect or realise you’ve been subject to unfair treatment by a lender, it’s important to act promptly. In most cases, unfair lending claims must be brought within six years of the event you're complaining about – or three years of the date you first became aware. If the limitation period expires, you may no longer be able to claim.

At Complex Law, we will manage the whole process for you, end-to-end. From reviewing your case to assess whether you have a claim, to making a formal complaint to the lender, and guiding you through FOS referrals or court proceedings if necessary, you’ll receive personalised, plain English support throughout. If you believe you’ve been affected by unfair lending, speak to one of our team today, and we’ll advise on the best way forward.

Frequently asked questions ‍

I took out a payday loan years ago, and the interest was enormous. Can I still make a claim?

It depends on a couple of factors: when you took out the original loan, and when you first realised the lending might have been unfair. There are time limits for both. But, if the payday loan was approved without proper checks (quite common in the past), then you could still have a claim even though you’ve paid back the full loan. Speak to Complex Law, and we'll check whether your case falls within the limitation period.

My credit card limit kept going up without me asking for it. Is that unfair lending?

Yes, it may constitute unfair lending. Lenders are required to carry out a new affordability check before they increase a credit limit. If they just periodically increase the limit on your credit card without making these checks, then it could be considered irresponsible lending, especially if you were regularly close to the limit, or only making minimum payments. 

I complained to the lender directly, and they rejected my complaint. Is that the end of it?

No, there are still options open to you. You have six months from receiving a final rejection to refer the matter to the Financial Ombudsman Service. They will review the case and may rule in your favour. For high-value or complex cases, there’s also the option of court proceedings. Speak to Complex Law before accepting the lender's decision – many valid claims are initially rejected by lenders and go on to succeed at a later stage.

I don't have copies of my credit agreement or any of my statements. Can I still make a claim?

Yes, you can. A lack of paperwork shouldn't prevent you from exploring whether you have a valid case. You can make a Subject Access Request (SAR) to the lender, which obliges them to provide copies of the personal data they hold about you – including your credit agreement, account history, and internal notes. If you need assistance with the SAR process, we can help.