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 complaint 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 complain.
What we look at
To help us consider a complaint fairly, we’ll ask you to provide some information. We’ll make our decision about what happened using evidence provided by you, the lender and any relevant third parties.
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 Financial Conduct Authority (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
If we think your lender did something wrong or treated you unfairly we’ll ask them to put things right. Our general approach is that you should be put back in the position you would have been in if the problem hadn’t happened. We may also ask your lender to pay you compensation if we think you experienced distress or inconvenience.
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. The following examples give an idea of our approach:
Complaints where we agree you shouldn’t have been provided with a loan
We may ask the lender 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 it isn’t unfair for you to pay this back. But there’ll be some rare cases where we don’t think this is fair. This’ll very much depend on what exactly has happened.
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
If you’re worried about money and finding it difficult to know where to start, the government-backed MoneyHelper service can help you find a way forward. Whether it’s living on a squeezed income, working out how to prioritise your bills and payments, or access to free, expert debt advice, they can help you take the first step towards getting on top of things.
StepChange Debt Charity offers free, flexible debt advice that is based on a comprehensive assessment of your situation and provide practical help and support for however long it’s needed.
Information for financial businesses
If you’re a financial business looking for information to help you resolve complaints, detailed information about home credit complaints can be found in the business section of our website.