Discretionary Commission Arrangements - Compaints and refunds

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.


UK Credit, established in 2009, is a Homeowner Guarantor Loans company. They also use Open Banking to assess the affordability of any loan. They are part of the Norfolk Capital Group, which has over 30 years’ experience in consumer credit.

Before I look at problems and complaints with/about UK Credit, I’ll give a brief explanation of Guarantor Loans and the Open Banking system.


What is a Guarantor Loan and who is likely to want a loan of this type?


A guarantor loan works in the same way as any loan; the lender lends you money, which is paid back on a weekly, fortnightly, or monthly basis. The only difference is that a third party, or ‘guarantor’ is part of the contract. The guarantor “guarantees” to make the repayments if you, the borrower cannot. A guarantor can be a wife/husband, partner, family member or close friend or colleague – so essentially anyone who knows you and who you trust, and who is a homeowner.


Lenders often send the loan straight to the guarantor to allow them a two-week cooling off period before they send it on to the borrower. If the guarantor is satisfied with the arrangement, they then send the borrower the lump sum. The borrower is responsible for the repayments.


Who would want/need this type of loan?


Any person who has tried to get a traditional/regular unsecured loan and has been rejected by lenders due either to a poor or non-existent credit history, could find that, with a guarantor loan, they can access finance for general lifestyle or emergency expenses, as it is the guarantor’s credit rating/history that is scrutinised, not theirs. For example, those who are self-employed, and unable to quantify income, will struggle to find a traditional lender to agree to lend, and this is where a guarantor loan can meet their needs.


In addition, opting for a guarantor loan should/could give the borrower the opportunity to improve their credit score and prove their financial trustworthiness - if repayments are made on time and in full.


Guarantor loans have become a much more attractive option compared to say a Payday loan, as it is invariably instant cash, but without the prohibitively high interest rates and short repayment terms of a Payday Loan – commonly 30 days. A borrower’s application will even be appraised if they have a CCJ (County Court Judgement) against them for debt, so it is plain to see how this type of loan could be financial lifeline for those who have fallen on difficult times or are not in salaried employment.


What is Open Banking?


Open banking is the system whereby all regulated banks in the UK must let you share your financial data (so all the information that is found on bank and or credit card statements – regular payments, spending patterns/habits, the companies you use etc.) with authorised/regulated providers – but only with your permission.

This system was introduced by the government to pioneer financial services (and increase competition among financial services companies), and in the long run, provide you, the customer, with better products to manage your money.

UK Credit has incorporated this system into their lending model; the crucial thing to be aware of when entering a contract for a loan with them is that they must seek and obtain your permission to share your bank account details with them. If you do not wish to share your data with UK Credit, along with many more loans companies who utilise this system, then you cannot borrow from them; equally, if your bank account cannot be accessed online, you would not be eligible for a loan with them.

Before agreeing to share your financial data with any company, it is essential that you have checked that the company requesting to see your data is regulated/authorised to do so – your bank will be able to help you with this is you are unsure. UK Credit are authorised and regulated by the Financial Conduct Authority.


Problems/Complaints with UK Credit

Any lender, including a guarantor lender, must assess thoroughly and completely the ability of the borrower (so not just the guarantor) to make the repayments, without suffering hardship, or having to take out further loans etc. to stay afloat. With open banking, this should make it much easier for the lender to be able to make an informed judgement about an applicant’s ability to repay the debt; this, however, has not prevented lenders, including UK Credit, from focusing on the Guarantor’s ability to pay, as it is they who will have to ultimately make the repayments if the borrower defaults.

On UK Credit’s website, they have a list of requirements which must be met for a borrower (not the guarantor) to be considered for a loan; there are some pretty basic criteria, starting with “must be a homeowner, tenant or living with parents, have been a UK resident for three years and have a current active bank account, live in England, Scotland or Wales, be over 21 and under 70 at the start and end of the loan terms respectively, be employed, retired or in receipt of certain benefits” etc – the list goes on. Right at the end of this list is – “be able to afford the repayments”. This is, without doubt, a critical and deciding factor, and yet, most complaints made by borrowers claim that UK Credit did not assess correctly their ability to afford the loan – despite the use of open banking. 

The Financial Ombudsman Service states, in its annual complaints data for the 2020/21 financial year, that unaffordable lending was the most complained about issue, with 57,571 new complaints.

For example, customers have stated that from their bank account information, it was clear that they regularly gambled, with sums going to different gambling companies, consistently and over a period of several years, and yet this was not flagged as an issue, when in fact it was a huge problem, and one that should not have been ignored. Customers also allege that their obvious inability to afford a loan was overlooked, as UK Credit focussed in main on the guarantor’s financial situation, as it is they who would have to make the repayments for the borrower if they defaulted

Claims Management companies, such as Redbridge Finance, are also finding that the huge volumes of PPI complaints have now been overtaken by complaints about unaffordable loans, UK Credit being one of the companies complained about by borrowers. Guarantors themselves have been coming forward with various complaints, many of them claiming that they did not realise that they would be liable for the payments if the borrower could not make them, and also that they couldn’t afford them anyway!

Another area of criticism of UK Credit (and other loan companies) is that when the borrower’s financial situation changed, the lender did not treat them fairly when they could not afford the repayments; alongside that is that if a payment failed, for whatever reason, the Guarantor was contacted too quickly.

As we all know, COVID 19 has affected most of us financially. Many customers of UK Credit also have loans with other loans companies, and several of these customers have complained about the fact that where other companies have offered to defer or freeze payments due to job loss or being put on furlough, UK Credit also did this, but charged for the privilege, and added interest. One poor customer lost his job, UK Credit agreed to put his payments on hold “to help” – he now will have to pay £16,700 for a £6000 loan.

How could Redbridge Finance help with a UK Credit Complaint?


If you (or your guarantor) feel that UK Credit lent you money and you believe they did not undertake in-depth checks to see if you could afford the loan, then we can help by assessing your claim to see if you were mis-sold the service they offer.

Or, if you feel that you have been treated unfairly, for example if your financial circumstances have changed, and UK Credit have not tried to help you in any way, then please go to www.redbridgefinance.co.uk and register. Our claims experts can take on your case and make a claim for a full refund of all the interest and charges that UK Credit has charged.


If you want to make a complaint against UK Credit, the process is very straightforward. All you need to do is sign up on our site and let us know which lenders you want to make a claim against. We then assess the information you have provided and take your claim forward by making a complaint on your behalf. We deal with the responses from UK Credit, and of course will keep you informed every step of the way.