Affordability Refunds from Loans with Hidden Commissions

Quick Navigation

• Introduction
• Do I have a claim?
• How Do I Claim?

Introduction

Many loans come with hidden commissions or fees that make repayments higher than expected, leading people into more debt while trying to meet their obligations.

When you took out a loan, the lender should have ensured it was affordable for you, including any commissions or fees involved. Unfortunately, many lenders fail to disclose these costs clearly, resulting in loans that should not have been issued.

This guide explains how to complain about loans with hidden commissions and includes a template you can use. Many people have successfully won complaints, resulting in:

• A refund of commissions and fees paid.
• Removal of commissions from the total loan balance, leaving only the original amount borrowed to repay.

These complaints do not harm your credit record if you continue making repayments while the complaint is processed.

Contents

• A Quick Overview
• What Types of Loans?
• What Are Hidden Commissions?
• How Does This Work?
• Complain to the Lender
• Go to the Ombudsman
• Other Information That May Help

Do I Have a Claim?

You can complain about:

• Personal loans, including those from high-cost lenders, banks, and credit unions, where hidden commissions or fees were applied.
• Loans still being paid, already repaid, defaulted, or under a payment arrangement/DMP, where commissions were not fully disclosed.
• Consolidation loans where hidden commissions were included, making the loan still unaffordable.
• Car finance agreements that include undisclosed commissions – but be cautious if still paying. Read Car Finance Affordability.

These complaints do not apply to mortgages or business loans.

What Are Hidden Commissions?

Hidden commissions are additional charges that were not clearly disclosed when you took out the loan. These can include:

• Commission fees added to the loan amount without your knowledge.
• High-interest rates that incorporate hidden fees or commissions.
• Additional charges bundled into your monthly payments, making the loan seem more affordable than it truly is.

The regulator defines an affordable loan as one where the total repayment, including all fees and commissions, is reasonable and does not create undue hardship or require borrowing elsewhere.

How Do I Claim?

Follow these steps:

1. Complain to the lender using the provided template.
2. The lender has up to 8 weeks to reply.
3. If rejected or no satisfactory offer is made, escalate the complaint to the Financial Ombudsman Service.

Complain to the Lender

Email the lender directly using their complaint address. Include:

• A subject line: "AFFORDABILITY COMPLAINT – HIDDEN COMMISSIONS."
• Details about your loan(s) and any hidden commissions or fees involved.
• Copies of your bank statements and credit report if available.

For a list of lender email addresses, visit Lender Email List.

Go to the Ombudsman

If your complaint is rejected, submit it to the Financial Ombudsman Service. Use their online complaint form. Attach relevant documents like:

• The lender's response.
• Your credit report.
• Bank statements.

Other Information That May Help

Include as much information as possible when filing your complaint. If you’re unsure whether your loan is affected by hidden commissions, gather documents that will help demonstrate how your loan’s repayment terms may have been inflated due to undisclosed fees.