What is home credit?
Home credit (which can also be called home-collected credit or “doorstep lending”) is a type of unsecured cash loan arranged at a borrower’s home. The loans are usually small (a few hundred pounds) and typically last for a few months. But, in some instances, the loans can be for much more and can last for periods up to two years.
The loan repayments are usually made weekly and an agent from the lender usually goes to the borrower’s home to collect payment. We sometimes hear from people who think they shouldn't have been given the loan because they couldn't afford it, or complain that they can't make their payments and the business is not doing enough to help them.
Types of complaints we see
People who have taken out home credit might complain to us that:
- I shouldn’t have been given a loan, or loans, because I couldn’t afford it and my lender should have known this at the time
- My financial circumstances have changed and I can no longer afford to make the repayments to my loan but the lender isn’t treating me fairly
- The amount the lender says I owe is wrong
- I didn't take apply for the loan
- I’m being chased for a debt by a debt collector
- The agent didn’t turn up so I couldn’t make payment
- The agent was rude or intimidating
- The agent discussed my circumstances with someone else
How to complain
The first thing you should do is talk to your lender and explain what's happened and why you're complaining. They need to have the chance to put things right. We only look at complaints that a business has had a chance to look at first, unless both sides agree.
The business should look at the complaint within certain time limits and give you their final response, and within eight weeks for most types of complaint.
If you’re not happy with their response, you can bring your complaint to us.
Find out more about how to make a complaint.
What we look at
Irresponsible or unaffordable loans
When agreeing to your loan, lenders need to do enough to be able to make a reasonable decision on whether you'd be able to make the repayments without too much trouble.
We’d expect a lender to show us what checks they did to make sure you could afford to pay it back. We’d then decide whether those checks were enough, taking into account the FCA's rules.
Disputes about how much you’ve paid
If you’re complaining about payments not being reflected in the amount you owe, we’ll usually look at things like:
- What’s recorded in your payment book?
- What you and the lender have told us?
- Does what’s been said match up with what’s been done?
- Have there been any similar complaints about the same agent previously?
Putting things right
Complaints where we agree you shouldn’t have been provided with a loan
If we think your lender did something wrong or treated you unfairly we’ll ask them to put things right. The exact details of how we’ll ask your lender to put things right will depend on the nature of your complaint, and how you lost out. This might include (if the loan was repaid) asking them to:
- refund any interest and charges you paid adding 8% simple interest; and
- remove any adverse information recorded on your credit file.
Or, where there’s still an outstanding balance:
- remove all the interest and charges added on and make sure the balance is only made up of what was lent to you;
- deduct any payments already made;
- if this means you paid too much, then the extra should be refunded to you adding 8% simple interest.
Sometimes there’ll still be an outstanding balance even after all adjustments have been made. And we’ll usually say that it isn’t unfair for you to pay this back. But there’ll be some rare instances where we don’t think this is fair. This’ll very much depend on what exactly has happened.
We may tell your lender to pay you extra compensation if we think you were caused distress and inconvenience – especially if we find that your lender acted unfairly or unreasonably towards you in some other way.
Complaints where we agree the lender says you owe the wrong amount
If we think your lender did something wrong, we may say they should put things right by one, some or all of the following:
- waiving interest for a short period of time (or refunding interest if it was applied at the start);
- allowing extra time for you to now make missed payments;
- restructuring a loan or loans;
- paying compensation for any distress and inconvenience caused.
A borrower complains about a number of unaffordable home credit loans
A borrower complains that an agent kept part of her payment
The Money Advice Service has further information on its website about home credit or doorstep lending.
Detailed information for businesses
Businesses can find out more in our detailed information about handling complaints about home credit.