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.


Polar Credit is a relative newcomer to the high cost, short term unsecured loans market, and is a direct lender (rather than a broker). Polar Credit is a trading name of APFIN Ltd; APFIN is known for its short-term loans (in essence, Payday Loans) through the sister brand CashASAP. Polar Credit have moved away from the traditional payday loan option, and instead, offer a credit line (also known as an open line of credit /personal revolving credit line). They state that this is more user-friendly and cheaper than a payday loan, and I would certainly agree with the latter!

What is a line of credit?

A line of credit is when a lender makes an agreed amount of cash available to you (credit limit) on an ongoing basis. If you then need to “borrow” any of that cash from your “line of credit”, you transfer it to your bank account. The credit line, much like a credit card, is repaid via monthly repayments, and, as long as the credit limit is not breached, the cash can be accessed as and when it is needed.

Credit lines are a very new type of lending in the UK. The first credit lines began to appear between 2016 and 2019; typically, people would turn to credit cards, bank overdrafts and/or payday loans to manage everyday expenses and unexpected cashflow shortfalls. However, due to perhaps a bad or non-existent credit history/rating, or being in possession of a CCJ, along with other factors, for some, a credit card or overdraft was not an option. Payday loans were seen as the easily accessible way to cover cash shortfalls, but were inflexible in their repayment terms, and charged eye-wateringly high interest rates. The credit line was created to provide a service which combined the convenience of a payday loan, with the practicality of an overdraft and the flexibility of a credit card.

So, from your personalised credit limit you can borrow as much or as little as you need. Repayments are made on the same day each month, subject to a specified minimum - in the case of Polar Credit this is made up of the interest for the statement period, default charges (if any), and transaction charges, any amount that is still overdue from the previous statement, and then £10 or 5% of the outstanding capital, whichever is higher.

How much does a credit line cost with Polar Credit?

With no set-up fee, Polar Credit charges a transaction fee of 1.65% each time funds are withdrawn, and then charges interest at a rate of 60.23% while you’re borrowing. The interest equates to a daily rate of 0.165%, and the overall cost of borrowing translates to a representative APR of 68.7%. Easy to see why payday loans are becoming more and more unpopular with their scarily high APRs!

Polar Credit uses the “open banking” system to help it assess creditworthiness and affordability.

What is Open Banking, why does it alarm some people and why it is actually a positive process!

Polar Credit, along with many other lenders and financial institutions now use open banking to help them decide whether to lend. Many borrowers who are new to this process have reservations or are nervous about allowing a potential lender “access” to their bank account. But open banking simply means that all regulated banks in the UK must let you share your financial data (so any information that can be found on bank/credit card statements – regular payments, spending patterns/habits, the companies you use) with authorised/regulated providers – with your permission. Polar Credit is, as mentioned before, a newcomer to the line of credit arena, but you will probably have heard of SafetyNet Credit and Tappily, and both have incorporated this system into their lending model; the key thing to remember about signing up for a loan with them is that they must ask and obtain your express permission to share your bank account details with them. Equally, any company who has your permission is only able to look at transactions on a “read-only” basis – at no point do you share your internet banking login details. Polar Credit use Credit Kudos, which is a regulated open banking service provider. Polar Credit believe that they can offer lines of credit to those who may have been rejected on their credit score alone – using open banking data to support applications for loans is becoming more common in the UK. If your bank account cannot be accessed online, you will not be able to apply for credit with companies who use this open banking system. If you do not wish to share your data with any company, then companies like Polar Credit et al are not for you.

Complaints and criticisms about Polar Credit

Some customers of Polar Credit, (and other similar lenders) have complained that they failed to check that the loan was affordable (see next paragraph) to the borrower, and that they did not make sure that the borrower was likely to be able to make the repayments. As with other types of loans, e.g., payday, guarantor, customers are complaining that they were offered credit, when it should have been evident from looking at their credit history/bank account statements that they would be unable to afford to make sustained repayments, and that the lender was irresponsible to lend to them in the first place. Customers have complained to claims management companies, including Redbridge Finance, that their bank accounts would show that they had high levels of financial commitment, or had several other loans, or had a gambling addiction, all of which should have indicated that they should not have been lent any money. Other complaints are that customers did not realise that interest is added every day as a percentage of the loan balance, or that it is too easy to be repeatedly given a credit increase (if the account is managed well) and not realise that this would increase the interest paid.

Despite Polar Credit being relative newbies, they have still racked up a few 1-star reviews on the UK’s most “trusted” review site - no surprise there. But what is very surprising, and quite shocking, is that with two of those negative reviews, where the customer had managed their account well, had repaid everything owed and were disappointed that they were refused another line of credit, Polar Credit has responded by explicitly stating that the customers had too many gambling transactions on recent statements for them to re-lend! Quite rightly, the customers are taking that further!

What is meant by “affordable”?

A borrower might think that if they make all their line of credit repayments on time, it is deemed to be “affordable”. However, the FCA and FOS have a different rationale – they state that a loan is only affordable if you can make the repayments on time, without hardship, and are still able to meet other financial commitments.

How can Redbridge Finance help if I think I was mis-sold a line of credit loan with Polar Credit?

If you believe that 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 Polar 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 any charges that Polar Credit have charged you. If you want to make a complaint 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 Polar Credit and will keep you informed every step of the way.

If you have had problems repaying your loan or think you might have been mis-sold a loan, then you could be entitled to a refund. Contact us today by going to www.redbridgefinance.co.uk and signing up, and we can assess if you have a claim.