Consumer Credit Act reform: what it could mean for old payday and catalogue loan refunds

If you believe an old payday loan or catalogue account was unaffordable, the current reform of the Consumer Credit Act 1974 does not remove your ability to complain. The government announced its policy on 18 May 2026, and the Financial Services and Markets Bill was introduced in Parliament on 19 May 2026.

The reform is not yet in force. The Bill must complete its parliamentary stages, the FCA must consult on replacement rules, and transitional arrangements will be needed before existing provisions are switched off.

What the reform is designed to change

The government plans to move many detailed information and disclosure requirements from the Act into the FCA Handbook. It also plans to repeal statutory sanctions that can currently make an agreement temporarily unenforceable, or prevent a lender from charging interest, when certain prescribed documents or notices are defective.

The FCA’s supervisory, enforcement and redress powers would remain available. You can read the government’s summary of the Consumer Credit Act reform.

The government is not currently changing section 75 or the unfair-relationship provisions in sections 140A to 140C. Those more complex protections are being left in legislation while further policy work is undertaken.

What it means for affordability complaints

Payday and catalogue affordability complaints usually focus on whether the lender carried out reasonable and proportionate checks and whether repayments could be made sustainably without causing financial difficulty.

Relevant evidence may include repeated borrowing, frequent top-ups, rapid reborrowing, rising catalogue limits, missed payments and signs that you were using further credit to meet existing commitments. Our guide to top-up loans and rollovers explains why repeated borrowing can matter.

Where a complaint succeeds, the outcome depends on the circumstances. It may include refunds for interest and charges, a reduction of an outstanding balance or corrections to your credit file. A refund is not automatic.

Existing and proposed time limits

You usually need to complain within six years of the event, or within three years of when you became aware, or reasonably ought to have become aware, that you had cause to complain. Exceptional circumstances can sometimes justify a later complaint.

The lender normally has eight weeks to issue its final response. You generally then have six months from the date of that response to refer the case to the Financial Ombudsman.

The Financial Services and Markets Bill proposes an absolute ten-year limit for most Ombudsman complaints, measured from the relevant act or omission. The FCA would be able to create exceptions. This proposal is not yet law, and its commencement and transitional effect remain subject to the legislative process.

What you should do now

Gather your agreements, statements, credit reports, bank records and correspondence. Write to the lender explaining which lending decisions you dispute, why the credit was unaffordable and what warning signs you believe should have prompted stronger checks.

You can complain directly without paying a representative. If the lender has entered administration or no longer trades, check who handles complaints and whether any redress or insolvency process remains open. Recoveries from an insolvent firm may be limited.

You may also choose to use an unaffordable lending claim service, but review the agreement, cancellation rights, charges and possible deductions before proceeding.

Frequently asked questions

Will the reform stop payday loan refund complaints?

No. The reforms do not currently remove affordability complaints, section 75 or the unfair-relationship provisions. The final position will depend on legislation and later FCA rules.

Does an old loan automatically qualify for a refund?

No. The outcome depends on the checks completed, your circumstances at the time, the lending pattern, the available evidence and applicable time limits.

Can I complain about catalogue credit-limit increases?

Yes. You may complain where a provider increased your limit without proportionate checks or despite signs of financial difficulty.

Get help with an affordability complaint

Claim First can assess whether you may have grounds to complain about unaffordable lending. We also assist with mis-sold car finance, housing disrepair claims and scam recovery. Any service terms, fees and potential deductions should be explained before you decide whether to proceed.