There's a right and wrong way of complaining against payday lenders. If you get it right first time, you're in the minority. There's almost an art to it. But once you know the system with regards to payday lenders, I believe all justifiable complaints can be settled fairly.

The payday lenders that remain in the industry are not here to keep paying out in compensation for their past mistakes. They will try almost everything to dismiss valid causes for complaint. But here's how to go about it properly.

NEVER call them! Like never. Not only are you wasting time and effort, but they'll try and manipulate you and put you completely off your aim.

Keep everything in writing. In my experience, emails are fine and entirely admissible in court (should it get that far). Snail mail is fine too, just more of a faff.

If complaining about an array of loans with a particular lender, firstly put in an information request. You can simply ask them for all the data they have relating to you and your loans. If they play hard-ball, put in a SAR request (costs a tenner and takes up to 40 days, but is a legal requirement to comply with).

Once you have your data, fire off your FORMAL COMPLAINT. This 'first' complaint must be as detailed as possible (to avoid future letter tennis). Include EVERYTHING that has cause for complaint (see library here for this). Make it clear what you would like them do, be it refund interest paid on unaffordable loans, remove data from credit files etc. Lenders have 8 weeks to issue their final response. Some are quicker than this and come back dismissing everything with a template response.

In some rare cases, you may succeed right here. Well done, job done. But most of the time, you're left with the options of taking the complaint to the FOS, the ICO or initiating legal action.

The problem with the so-called adjudication services such as the FOS and ICO, is that they have to be prize winners for inconsistency and incompetency. They are target monitoring, box-ticking, largely inept civil servants who have just two weeks of training before being let loose on often highly complex cases involving thousands of pounds. That's not to say they sometimes get it right. But frequently they don't just get it wrong, they actually ignore what's in front of them and make stuff up. In my opinion, the FOS cannot be trusted.

However, the justification of using the FOS is that it's free and you may have your case upheld. It's 50/50 after all.. flip a coin and you may win. Even if your case is not upheld you can reject the decision and it's not legally binding. Not helpful if proceeding with litigation, but not always disastrous.

Now here's where you can ramp things up a bit and begin litigation proceedings. If I were to go through my huge number of complaints against lenders all over again, I would bypass the FOS altogether and go straight to litigation after formal complaints. You must start by sending the lender a Notice of Intended Legal Action. It’s best to use recorded mail for this as this notice is part of the MoJ Pre-Action Protocol and proof of postage could be paramount later on. This notice should be kept straight to the point. There are templates available on various websites, but’s it’s best to write your own.

Title the letter ‘Notice of Intended Legal Action’ to be clear to the lender that this is a pre-action warning that needs responding to. Summarise the fact that you now intend to commence legal action as they have not resolved your cause for complaint. Then clearly state what they have done wrong and the laws, regs, guidelines etc they are in breach of i.e. CCA, DPA, FCA/ICO regs etc. You can quote examples of other FOS cases of identical nature which have been upheld if necessary. You must also be clear about how they can put things right and avoid your intended action. Give them a minimum of 14 days to respond satisfactorily.

Receiving letters such as this is not something that payday lenders are typically used to. In some instances, they may fold there and then and settle your complaint. In other instances, they will continue to dispute everything in your claim and may pass the matter on to their legal department (i.e. Colin, two desks over in the office). Other times they may ignore you completely thinking that you are bluffing.

If they either dispute your claim or don’t respond after 14 days, here’s where you start your legal claim. [NOTE: Only start legal proceedings if you have the required evidence to prove they are in breach of statute law(s) and/or regulatory rule(s). You will need to demonstrate clearly why they are at fault]. It’s really not as daunting as it sounds. The easiest way is via Moneyclaim Online. Open a Gov Gateway account and all the instructions are there. The fees for doing it online are cheaper as well. For claims up to £300, it’s only a £25 fee, for up to £3000 the fee gradually increases to £105. All fees are added to the total sum you are claiming for, so you’ll get them back if they settle or you win later on.

You’ll have to complete the N1 Particulars of Claim form. This is what will be sent to the defendant and it needs to comply with the Practice Direction. There are numerous guides available for completing this. But keeping it very simple and on point is the best way to go. Once sent, the defendant has 14 days to respond by either Acknowledging Service and admitting liability, accepting partial liability, or registering their intention to defend. If after 30 days, there has been no response whatsoever, you can apply for a Summary Judgement against the lender and they will have a CCJ registered against them.

Upon receipt of the claim form, most lenders are typically not going to want to end up in front of judge pleading that they are a responsible lender and that the FCA got it all wrong. In addition, as soon as a court hearing is allocated for a payday lender, the Daily Mail will be all over it like a Diana exclusive. The press love stories against these companies and it would only trigger more bad PR for them. So, it is much more probable that they will try and settle outside of court.

In the unlikely event that they do take it all the way, worst case scenario is you don’t win, however, this is unlikely if you use your evidence and other case studies effectively. If you have an outstanding balance with them, it’s probably best to thread carefully if the sum you’re claiming for is less than you currently owe.

I think if more people started issuing claims against these dismissive lenders, they would have to start resolving complaints sooner. But as it stands, most complaints are not upheld and that’s the end of it. Irresponsible lending of unaffordable loans are the biggest cause of complaint, and if taken all the way, I’m very confident that everyone can be awarded the appropriate redress. Use all of the information available to you and never take a lenders final response as the final word.

Good luck with your battles, keep going and you will win in the end!