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Satsuma Loans

You might not have to pay Satsuma Loans and you may be due a refund!

Have you taken out a loan with Satsuma Loans? Were the loan payments never affordable to you? Are Satsuma Loans threatening to take you to court, or threatening you in another way?  If you are facing any issues with Satsuma Loans, then this article should help you. You might be able to cancel your loan and get a refund!

It’s not your fault. Complaints to the Financial Ombudsman have risen this year from 830 to 2,006, so it’s safe to say that you’re not alone.

Deal with your debt today and feel better tomorrow.

Satsuma Loans UK

Who are Satsuma Loans?

Satsuma Loans offers short-term loans of up to £1,000 with a repayment period of up to 12 months. Customers also have the option to repay the loan on a weekly or monthly basis. The company is a registered lender in the UK and a trading name of Provident personal credit Limited.

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New laws for Satsuma Loans

It is really not surprising that so many people are in debt these days. Prior to the new laws being brought into force, the lending industry was toppling over £2 billion, and this was fueled by irresponsible lending and exceptionally high interest rates.

Unfair practices were identified by the Financial Conduct Authority, which have led to these companies receiving huge fines. Wonga were one company who received a fine of £220 million, which unsurprisingly, ended up putting them out of business! Other companies, including Quickquid were fined £18 million. Other well known loan companies also received huge fines.

Customers that were found to have failed to have properly assessed customers during their loan application received a refund. The new law which was introduced seemed to work, and over the 3 years following the introduction of the law, the number of loans issued dropped from 10 million to 1.8 million, and the number of lenders fell from 240 to 60.

If Satsuma Loans did not follow any of the laws below, then you could claim for a refund

Full Refund

Law #1: The loan must have been affordable

This is one of the main laws which has given customers refunds. The Financial conduct Authority, who are the regulator for lenders in the UK, have said that a lender is not permitted to allow you to sign an agreement unless the lender has carried out a creditworthiness assessment.They should also have given a proper regard to their affordability.

The law also says that any repayments must be “sustainable”. According to this, you must be able to make your repayments on time, while being able to maintain your reasonable commitments (eg. Rent, bills, food, car.) You should not have to borrow more money to make repayments.

In short, the repayments of the loan must have been affordable, when you take all of your other expenses such as rent, bills, food, car into account. If you have been unable to afford repayments of your loan, or you have had to take out another loan to cover the repayments then you could claim for a refund!

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debt solution

Is all this information starting to feel overwhelming? Don’t panic! I’ve put together a 4 question debt calculator so you can quickly and easily find the best solution for you. If you’re eligible for the new government scheme, you could write off up to 85% of your debt! Answer the four questions now.

Law #2: limits on interest and charges

This law tends is a good addition when claiming under law #1, although, realistically, you may be able to claim for this without claiming on law #1. The Financial Conduct Authority has introduced a price cap which is designed to protect borrowers from excessive charges. These include:

  • A cost cap of 0.8% per day on the amount borrowed – this is a combination of both interest and all fees charged.
  • A cap on default fees of £15 – after a default, interest may still be charged, but it cannot be more than the original rate of 0.8% per day.
  • A complete cost cap of 100% – you should not be asked to repay more than 100% of the money borrowed.

The limits are relevant to all credit agreements with an interest rate of 100% or more and that are expected to be fully or substantially repaid within a year.

Other laws came into force in May 2017. Lenders have a responsibility to provide details of their products on a price comparison website which has been authorised by the FCA. Borrowers should also be provided with a summary of the cost of borrowing.

If Satsuma Loans are found to have breached any of these laws and they are trying to charge you more than they should,then  your credit agreement will have become unenforceable and they will not be able to make you repay the loan! You would have a strong case to claim money back

Law #3: continuous payment authority

In most cases, loan companies will expect you to repay the debt using a Continuous Payment Authority (CPA). The CPA provides the company with permission to remove any sum they want from your bank whenever they want. They should always inform you before they debit your bank account, but unfortunately, many of them do not bother to carry out this crucial step. The result of this is that you may be unaware that they money has left your account until you see your next bank statement.

If you are struggling with important payments such as your rent, mortgage or utility bill, and the money is suddenly taken by Satsuma Loans before these bills, you could end up in serious trouble.

New regulations mean that if the CPA fails to be paid on two occasions, the lending company is not allowed to make any further requests to your bank account.

There are other rules governing the amount of money which can be taken using a CPA. Loan companies are not allowed to take partial payments. If the borrower does not have enough money in their account to cover the full amount of the payment due, they must not take anything. You must agree that they can take a partial payment, otherwise they are not permitted to do so. You must give your permission in advance for them to do so.

When they do attempt to take money more than two requests or they have taken a partial payment without your explicit permission, they will be in breach of regulations and you should complain and put in a claim.

What if you can’t make your next repayment?

If Satsuma Loans have adhered to the guidelines, but you are not in a position to afford to repay the loan, there are some steps you can take to protect yourself.

If you have been paying them by standing order or direct debit, you can contact your bank and cancel these. Satsuma Loans will then not be able to collect payments automatically and you will gain control of your bank account. Your bank will probably advise you to let Satsuma Loans that you have done this, but do not have a legal obligation to do so. They will not be able to collect any money from you until you give them explicit permission to do so.

Even though you have cancelled the payments, you will still owe the money and you must take steps to deal with that directly. You might be tempted to bury your head in the sand, but you shouldn’t do this. Your first approach should be to contact Satsuma Loans and speak to them about your problems. They have an obligation to treat you fairly, so you should be able to reach an agreement to reschedule your repayments.

By law, lenders must:

  • Let debtors know where you can obtain free independent debt advice
  • Hold off debt recovery for a reasonable period of time, while you arrange a repayment plan possibly using a debt advisor
  • Give you reasonable time to repay possibly freezing interest and additional charges.
writing off your debt

How to write off your debt

It is possible to write off your debt entirely through an Individual Voluntary Arrangement (IVA). This is a formal agreement to pay the debt collectors an amount you can afford as a one-off sum or as monthly payment.

You only qualify for the government IVA scheme if your debts are over £1,700 and you have more than one debt. Fill out a 30 second form to see if you qualify with my 4 question debt write off calculator.

Do you wish to make a complaint?

The Financial Ombudsman Service received a staggering 10,529 complaints about these types of loans in 2017 and unfortunately, this is just the tip of the iceberg. Many of these could have been resolved without escalating to the Financial Ombudsman Service. If you wish to make a complaint, you’re not alone!

If Satsuma Loans has treated you unfairly, you may be able to get a refund, even if the loan has been paid off within the last six years. You can also expect to receive a refund on all the interest you have paid on the loan as well as any additional charges, plus 8% interest on any refunds. Some receivers have received thousands of pounds.

I’ve had 100s of success stories from readers who have followed the simple templates in my guide.

References

CONC 2.1 Application

CONC 5.2A Creditworthiness assessment

CONC 13.1 Application


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About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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