Last week, more than 350,000 former Wonga customers, who had been mis-sold payday loans, heard they’ll receive just 4.3 percent of what they were owed, after the firm went into administration. Following the news, Martin Lewis today appeared on This Morning, and urged members of the public who may be owed money to check to see if they could be owed hundreds or even thousands of pounds – and to do so sooner rather than later.
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While Wonga customers who were awarded payouts have been mis-sold their loans, they will only get 4.3 pence per £100 owed.
This means that a person who is due £2,000 will get just £86.
Should a person have been mis-sold a loan by another firm, Mr Lewis is urging them to act as soon as possible.
“Get your skates on,” he said today, adding: “It’s difficult because me saying that hastens the problem.
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Martin Lewis spoke about reclaiming money from payday loans (Image: GETTY)
“The quicker you do it the better the chance you’ve got…”
Mr Lewis also has said: “If you were mis-sold a payday loan by a firm that is still solvent, you get the full amount back.
“But if it goes bust, you’re just one of the creditors, and will be lucky to get a few pence per pound – as what’s happened with Wonga customers – other’s that are already bust include QuickQuid, Piggy Bank and Wage Day Advance.”
Some people who have taken out a payday loan may wonder whether they were mis-sold to.
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Payday loans: What counts as being mis-sold to?
Mr Lewis explained that prior to lending the money, there are certain things a payday lender must do.
Failure to do so counts as mis-selling, and the financial journalist has shared some examples of this.
He has said:
“The lender must examine your finances to ensure you can afford the loan and fees. So, for instance, you shouldn’t have been given a £1,000 loan if you only earn £500/month.”The lender didn’t make it clear to you how much it would cost you in total to repay the loan.”You weren’t given full or accurate information about how and when to pay back your loan.”The lender didn’t tell you that a payday loan should not be used for long-term borrowing or if you are in financial difficulty.”You weren’t told by the lender what to do if you have a complaint.”
Martin Lewis urged members of the public to act fast (Image: GETTY)
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Should a borrower have been mis-sold the payday loan, then they will be due back all of the interest, fees, charges, and eight percent statutory interest on top since they took it out.
Mr Lewis said payments from this mis-selling could reach hundreds or even thousands of pounds.
One person has said that they followed the Money Saving Expert founder’s advice, after getting 16 payday loans in two years.
They received a refund, getting more than £1,600.
Payday loans: How to reclaim
Mr Lewis explained that a person can claim on existing loans and loans that they have already paid off – as long as the case is raised within six years of taking it out.
Martin Lewis issued a ‘clarion call’ on This Morning today (Image: GETTY)
That said, in a few rare circumstances, a person may get longer.
The financial journalist is reminding members of the public that there’s no need to pay anyone to reclaim, as this can be done by oneself for free.
More information on reclaiming money from mis-sold payday loans is available via Martin’s ‘Free payday loan reclaiming tool & guide’.
Alternatively, members of the public can simply write to the lender explaining why they think they were mis-sold.
If the payday lender rejects them, there may still be a possibility in one getting some money back.
The Money Saving Expert founder has said: “Over 60 percent of people who then take their payday loan reclaim case on to the free Financial Ombudsman Service win.”