Complaining about a lender or finance company

If a lender has treated you unfairly, you have a free route to challenge it: complain to the lender first, and if it does not sort the problem out, take the complaint to the Financial Ombudsman Service. The lender has eight weeks to investigate and send a final response¹. If it misses that deadline, or you are unhappy with what it says, you can refer the complaint to the ombudsman, which is free to use².

The sorts of problems people complain about include being lent money they could not afford to repay, unfair charges, poor administration, and lenders refusing to help when someone falls into difficulty. The ombudsman can look at complaints about payday loans, the affordability of lending, the quality of goods bought or hired on credit, and other types of lending including mortgages³. In the quarter from April to June 2026 it received 53,600 new complaints across all financial products⁴.

What you can complain to a lender about

A complaint to a lender can cover anything the lender did, or failed to do, in connection with your borrowing. The Financial Ombudsman Service, which handles complaints that lenders do not resolve, lists the ground it sees most often for consumer credit: complaints about payday loans, the affordability of the lending, being unhappy with the quality of goods bought or hired with credit, and other types of lending including mortgages³.

With mortgages, the ombudsman sees complaints from people who say their lender applied unfair charges to their account, such as arrears fees, legal costs and field agent visit fees; would not agree to a concession they asked for, like a temporary switch to interest-only or a term extension; is unfairly trying to repossess their house; cannot afford their payments and the mortgage company will not help; or is harassing them about their arrears⁶.

Complaints about credit brokers are also common. People are often unhappy about being charged a fee by a credit broker for finding a loan, sometimes charged even where no loan was ever taken out or offered, and about being misled or not correctly informed about the loan's terms or cost⁷. Where a complaint relates to a credit broker, the FCA's complaint handling rules require the broker to forward the complaint to the lender and inform the consumer that it has been forwarded⁸. So if you complain to a broker, the complaint should still reach the lender.

In Northern Ireland, if your complaint is not resolved, Consumerline can refer it to the Trading Standards Service for investigation or to the Financial Conduct Authority, which authorises lenders⁹. The ombudsman route described below is also open to consumers in Northern Ireland, Scotland and Wales.

Start with the lender: a formal complaint and eight weeks for a final response

The process begins with the lender itself. Its customer services team is the first point of contact, and many complaints are settled at that stage. Where an informal approach does not resolve the matter, the next step is a formal complaint: by law, the lender then has eight weeks to investigate and give a final response¹. The same eight-week deadline applies to complaints about current accounts and other banking matters¹⁰, and to disputes with a bank, which has at least eight weeks to try to resolve the complaint before it can be taken further¹¹.

A formal complaint is simply a written account of what went wrong and what you want the lender to do. Useful things to include:

• Your name, address and account or agreement number
• What happened, with dates
• What you have already been told, by whom
• What you want the lender to do, for example refund a charge or remove information from your credit file
• Copies of anything that supports your complaint

Keep a copy of everything you send and a note of any calls. If the lender sends a final response and you disagree with it, or it sends nothing at all within eight weeks, the next step is the Financial Ombudsman Service¹. The final response letter should tell you how to contact the ombudsman¹¹.

Irresponsible lending: how affordability is judged

One of the most common grounds of complaint is that a loan should never have been given, because the borrower could not afford to repay it. The ombudsman's approach to these complaints is to look at whether the lender completed reasonable and proportionate checks before the loan was taken out, or whether it treated the borrower unreasonably or unfairly in some other way¹². What counts as reasonable and proportionate depends on the amount and type of credit: a bigger or longer loan generally calls for more thorough checking.

The rules apply across the market. Payday lenders must satisfy themselves that you can afford the repayments¹³. For guarantor loans, lenders need to make sure the borrower can afford the repayments without too much trouble, and must be able to show what checks they did if the loan is later complained about as unaffordable¹⁴. Credit unions always consider affordability when assessing loan applications¹⁵. The ombudsman has also reported that perceived unaffordable lending has driven complaints relating to credit cards¹⁶.

If you are complaining about unaffordable lending, the evidence that helps is usually your own: bank statements and payslips from the time, showing what your income and outgoings were, and the loan agreement showing what the lender asked you and what checks, if any, it recorded. The ombudsman will weigh what the lender knew, or should have realised, at the time of each loan, not what happened afterwards. The dedicated guide to complaining about an unaffordable loan goes through the arguments and evidence in more detail, and loan affordability checks explains what lenders must check before lending.

Payday and repeat short-term loans

Payday and other high-cost short-term loans generate a steady flow of complaints. In the quarter from April to June 2026 the ombudsman opened 210 complaints about short term lending (payday loans) and 271 about short term lending (instalment loans), alongside 2,103 about personal loans and 97 about point of sale loans (motor)⁴. In the same quarter a year earlier it opened 129 payday loan complaints, of which 17% were upheld¹⁷; in the final quarter of 2024/25 the uphold rate for payday loans was 25%¹⁸.

The ombudsman's own analysis of a sample of payday loan complaints found that two-thirds (64%) of the sampled cases featured more than one strand to the complaint. Poor administration, such as a loan paid into the wrong account or a payment not being registered, was the main feature in 14% of the 353 complaints sampled, and poor customer service, such as failure to return calls or rudeness, was the main feature in 3%. In 57% of non-fraud cases the loan was still ongoing at the time of the complaint¹⁹.

With repeat borrowing, the argument is usually that the lender should have realised the pattern was not sustainable. A published case study makes the point: a borrower named Ed had taken out 50 loans with the lender he complained about, and the ombudsman found that "the lender could have identified Ed's pattern of borrowing as problematic after he'd taken out his tenth loan"²⁰. The practical test is not whether each individual loan was affordable in isolation, but whether the cumulative effect of repeated loans meant the lender should have stopped or changed what it was doing.

If you are complaining about a payday loan, gather the loan history with that lender, your bank statements covering the period, and any evidence of other borrowing at the same time. The guides to payday lending and high-cost short-term credit and the payday cost cap explain the rules these lenders work under.

When the payday lender has gone out of business

Many payday lenders have closed or gone into administration, and that changes how a complaint works rather than ending it. If the lender is in administration, a claim for redress becomes a claim against its assets, and you follow the administrator's claims process rather than the ordinary complaints route. The ombudsman can sometimes still look at related complaints, for example where a bank was asked to stop a continuous payment authority and did not. In one published case study, a borrower named Jade asked her bank to cancel a continuous payment authority and cancel her card, and when she complained the bank said there was nothing else it could do and that she owed the money to the loan company anyway²¹. The ombudsman can examine whether the bank acted fairly in that situation.

Two points of detail are worth knowing. First, where a redress claim has already been made and the claimant is made bankrupt, or was a former bankrupt, the rules require the lender to be told about the bankruptcy²². Second, the ombudsman can consider complaints made out of time if there were exceptional circumstances, for example if the customer was incapacitated²³, so a missed deadline is not always the end of the road, though the exception is not guaranteed.

The guide to lenders that have closed or stopped lending explains what happens to your loan and any claim when a lender fails, and how to stop a continuous payment authority covers stopping repayments at your bank.

Taking it to the Financial Ombudsman: free, and within 6 months

Once the lender has sent a final response, or eight weeks have passed without one, the complaint can be brought to the Financial Ombudsman Service. The service is free and easy to use². The complaint is made by filling in its complaint form², and there is no need to pay anyone to represent you, for example a lawyer or claims management company².

The deadline matters: you need to make the complaint to the ombudsman within 6 months from the date on your final response². The same six-month limit applies to complaints about basic bank accounts²⁴ and to the Help to Buy: Equity Loan complaints process, which requires referral to the ombudsman within 6 months of the date on the final response²⁵. If you miss it, the ombudsman will normally not be able to look at your complaint, though it can consider out-of-time complaints in exceptional circumstances such as incapacity²³.

The ombudsman publishes contact details for regulated financial businesses, and the FCA publishes contact details for regulated financial businesses too, so finding the right address for a complaint is straightforward². If you are considering using AI to help complete the complaint form, the ombudsman asks you to avoid entering personal information you would not want shared, such as health or banking information, to use AI only to help organise information or put it clearly, and to check the resulting text carefully².

How the ombudsman investigates and decides

The ombudsman considers the facts and evidence from both the business and the customer, then sets out its findings, explaining its decision and what needs to be done to put things right³. How long that takes depends on what the complaint is about, how complex it is, and how quickly all the information needed can be obtained²⁸.

The investigation is not a court hearing. It is a review of the evidence against the relevant law and regulations, the regulator's rules, guidance and standards, industry codes of practice and, where appropriate, good industry practice². For example, where a complainant is experiencing or has recently experienced financial difficulties, the ombudsman checks whether the lender carefully considered whether the borrower could afford the interest rate, since otherwise the borrower would incur an early repayment charge if the property needs to be sold²⁹. On mortgage complaints it also looks at whether the lender gave reasonable notice of payment changes, gave fair and reasonable consideration to requests for a new interest rate, made sure there were no unreasonable barriers to arranging an interest rate product through accessible sales channels, and either provided suitable advice or was very clear it was not giving advice while supplying enough clear information²⁹.

For guarantor loan complaints, the ombudsman looks at whether the lender completed reasonable and proportionate checks before lending to the borrower and agreeing to the guarantor, and obtained the guarantor's agreement¹⁴. For credit broking complaints, the information it normally expects to see includes a copy of the customer's application, the lenders the customer was introduced to, how the business made its role and legal name clear, fee details, compliance with section 155 of the Consumer Credit Act 1974, the work undertaken to find a loan, and whether the customer's details were passed to another company⁷.

When it has finished investigating, the ombudsman tells the consumer whether it thinks the business treated them fairly, and explains how it reached its decision²⁸. The ombudsman can also look at complaints about financial difficulties affecting a borrower's ability to repay a mortgage, including complaints about advice received, mortgage arrears and charges, not being able to change or move a mortgage or take a payment holiday, and repossession before possession takes place or after it has happened³⁰.

What putting it right looks like: refunds, interest and credit file fixes

If the ombudsman decides the lender treated you unfairly, it tells the lender to put you back where you would have been if the mistake had not been made, and it may also award compensation for distress and inconvenience³¹. What that means in practice depends on what went wrong.

For unaffordable lending, the standard approach is set out in the ombudsman's own guidance. Where the borrower should not have been given the loan, it typically says the lender should refund the interest and charges the customer has paid, with interest. Where the lender should have realised further lending was clearly unsustainable, it is likely to tell the lender to get the loans removed from the customer's credit file completely³². The same guidance applies to home credit: a refund of interest and charges paid, with interest, and removal of adverse credit file information, or, if a balance remains, removal of all interest and charges so the balance is only what was lent, with payments already made deducted and any overpayment refunded with interest³³.

For guarantor loans where the borrower should not have been given the loan, the redress is the same shape: a refund of interest and charges paid, with interest, and removal of adverse information from the credit file, or, if there is still a balance, removal of all interest and charges so the balance is only what was lent, deducting payments already made, with any overpayment refunded with interest¹⁴.

Other mistakes have their own remedies. Where a lender says a borrower owes the wrong amount, the ombudsman may tell it to waive or refund interest, give extra time to make missed payments, restructure the loan, or pay compensation for distress and inconvenience³³. Where a mortgage company made a mistake the customer could not have known about, it generally tells it to rework the account as if the correct payments had been made, possibly writing off the extra money or some of it³⁴. Where the customer made the mistake, it is unlikely to tell the lender to write off the money, but will encourage the lender to work with the customer to arrange a fair way to pay it back³⁴. For poor advice, the remedy is to put the customer in the financial position they would have been in with proper advice, which might mean adjusting the capital balance or compensating for the cost of changing arrangements³⁵. For unfair or unauthorised broker fees, it will usually tell the credit broker to refund the fee, sometimes with interest, refund additional costs incurred, and pay compensation for distress or inconvenience⁷.

Compensation limits: up to £455,000

The ombudsman can tell a business to pay compensation, and the maximum it can award depends on when the complaint was referred and when the events complained about happened⁵:

For most loan complaints these limits are not the binding constraint: the amounts involved in unaffordable lending and unfair charge complaints are usually well below them. The limits matter for larger claims, such as some mortgage and investment complaints. An award can also include compensation for distress and inconvenience on top of putting the consumer back in the position they would have been in³¹.

Where the ombudsman cannot help

The ombudsman only covers businesses that are authorised by the Financial Conduct Authority or otherwise within its jurisdiction. The FCA is the regulator responsible for ensuring fair practice in consumer credit³⁶, and if you want to check whether a firm is legitimate or report a possible scam, the FCA is the go-to contact³⁶. Use the FCA's Firm Checker to confirm a firm is authorised before borrowing or complaining³¹.

There are other boundaries to be aware of:

• Buy now pay later: from 15 July 2026 most BNPL providers are regulated by the FCA, and if you are unhappy with a lender's response to a complaint about a deferred payment credit agreement you can complain to the ombudsman³⁷. Complaints about agreements before regulation may be more limited.
• Car finance: the FCA publishes a list of car finance lenders with how to complain against each, including a template complaint letter or email you can download and fill in³⁸. Complaints about point of sale loans (non-motor) were upheld in 47% of cases in the quarter from April to June 2025¹⁷.
• Claims management companies: if you used a claims firm and are unhappy with it, complain to the claims company first, asking for its complaints procedure, contacting it with your complaint and keeping a record³⁹.
• Court claims: the ombudsman is an alternative to court, not a replacement. If you are responding to a court claim for money and do not respond in time, you might have to pay more or get a county court judgment (CCJ)⁴⁰.
• Time limits: the six-month referral deadline is the main one, and out-of-time complaints are only considered in exceptional circumstances such as incapacity²³.
• Firms outside the scheme: the ombudsman's case fee arrangements mean 21% of covered firms have no more than two complaints referred to them in a year and pay no ombudsman case fee⁴¹, but all firms within its jurisdiction are bound by its decisions. Firms outside it, such as unauthorised lenders, are not: if you borrowed from a loan shark, that is a matter for illegal money lending enforcement, covered in loan sharks and illegal money lending.

If your complaint is about a debt collector acting for a lender, the same eight-week response deadline applies to complaints involving a logbook loan⁴², and the ombudsman can look at how the debt was collected. For free, impartial help with debts themselves rather than complaints, debt: help, solutions and your rights sets out the options, and what to do if you can't repay a loan covers the practical steps.