When a loan should not have been granted in the first place

This is written to be used rather than admired. Each section below is a decision about irresponsible lending complaints, and each one has a default.

The duty on the lender

Consumer credit regimes in many countries require a lender to assess whether repayments are sustainable, not just whether they are likely to be made. Sustainable generally means without borrowing further or going without essentials.

Checks must be proportionate to the amount, the cost and the borrower's circumstances. Where a lender skipped that work, the resulting agreement may be challengeable even though you signed it.

Common grounds

Repeated refinancing or top-ups that kept a borrower in continuous debt. Lending where the file plainly showed existing arrears, defaults or a pattern of escalating borrowing. Accepting stated income without verification where the amount clearly warranted checking.

Put simply, increasing a limit for a customer who had been paying only minimums for a long period.

What redress can look like

Outcomes vary by jurisdiction and can include refunding interest and charges, writing off remaining balances, and removing related adverse entries from the credit file. The principle is usually to put you back in the position you would have been in, so the capital borrowed is often still repayable. File corrections are frequently the most valuable part, since they affect future borrowing for years.

On an ordinary week, no outcome is guaranteed, and the assessment is made on the evidence of what the lender knew or should have found out.

Making the complaint

Write to the lender setting out each agreement with dates and amounts, and explain why the checks were inadequate. Bank statements from the period showing the actual position are the strongest evidence. Request the lender's own records through a data access request to see what it recorded at the time.

Ask for a specific outcome, including correction of any credit file entries.

Escalating

If the lender rejects the complaint, refer it to the ombudsman scheme in your country within its deadline. These schemes handle affordability complaints routinely and decide them on documents. Where a lender has failed or entered administration, a compensation scheme may exist, usually with its own rules and limits.

You do not need a claims management company, and using one costs a share of any award.

Some of this will suit you and some will not, and that is the point.

A note on framing

Complaining is not an admission of failure or an attempt to avoid a debt. The rules exist because lending to people who cannot sustain repayments causes predictable harm, and the duty sits with the party with the data. If the borrowing is still causing difficulty, run a free debt advice conversation in parallel rather than waiting for the outcome.

The useful part is this: the two processes are independent and both can help.

The takeaway

The duty to check affordability sits with the lender. Where it was skipped, complain with statements and ask for the file entries too.

Small and repeatable beats ambitious and abandoned, almost every time.