You do not need to use a Claims Management Company. You can make the claim directly to the lender and if they reject your complaint you can take it to the Financial Ombudsman Service free of charge, but you must do this within 6 months of the lenders Final Decision Letter.
As a Claims Management Company, we are obviously very biased about people making a Loan Claim.
We do get asked quite often if making a claim is fair to the lender and after all the applicant knew what they were doing when they applied. This is, on the face of it, a really fair comment and it is true. No one was forced to take out a payday loan, they normally searched for a lender and completed a lengthy application form in order to get the money. But where is argument runs out of steam is when you consider how easy it is to get stuck in a repetitive cycle of borrowing.
Even though lenders were, and are still to an extent, charging massive interest rates, sometimes up to 30% per month, the lenders needed to be charging that much, and also they needed to get the borrower to roll the loan over each month. They could not make money if someone borrowed for a month and repaid, they needed a couple of months of 30% interest to make the figures work and stay in business.
This was not the lenders being deliberately greedy or underhand, it is just that the cost of getting new customers, the cost of processing the loan, the cost of collecting the payments and of course the cost of the defaults.
So, if a payday lender needed a borrower to roll over (extend) the loan in order to make money, then they would have, typically, encouraged the borrower to not repay the loan, just pay the interest. This is where the lender was wrong and it is right that consumers make payday loan claims.
Not all lenders were treating borrowers badly. Some lenders had lower interest rates and some did not allow borrowers to roll over and these companies should not be punished.
As a company, Redbridge Finance will only make refund claims against certain lenders. For the lenders, we will make a claim against we only will submit a claim once we have fully reviewed the borrowing record of the lender and convinced ourselves that there is a case to be answered.
Sometimes customers get cross with us when we will not put a claim forward to a lender, but we have a duty of care to ensure that we have properly reviewed the case before we make a payday loan refund claim.