Mis-sold bridging loans & complaints – what are my options?


Have you been mis-sold a bridging loan? Here’s what to watch out for.

Bridging loans offer landlords and property developers the cash they need to complete a house purchase quickly. This finance means you don’t have to miss out on your next big opportunity while you wait around for your previous property to sell.

But, as with all types of finance, you need to go into the agreement with your eyes open. Some bridging loan companies can be aggressive and underhanded; that’s why you must find a reputable and trustworthy bridging finance lender.

But what happens if your bridging loan has been mis-sold? Whether you think you’ve been misled or you’re just pre-emptively researching to avoid red flags, we’re taking you through some common mis-sold loan situations and how you can rectify them.

Disclaimer: always seek professional legal advice. This article contains guidance only.

Ways bridging loans are commonly mis-sold


The lender did not have a consumer credit licence

The FCA (Financial Conduct Authority) issues consumer credit licences to businesses who carry out consumer credit activities i.e. lending money. But bridging loans for commercial purposes, are not regulated. This means many bridging finance lenders do not have consumer credit licences.

With bridging loans being largely unregulated, although borrowers aren’t protected by the FCA, it does come with some benefits, for example, loans are usually quicker to obtain, there are fewer hoops to jump through — which is useful in a commercial setting.

If you’re applying for an unregulated bridging loan, you’re best seeking out a provider who has a track record of lending in this area. You can compare all our bridging finance specialist lenders in our directory.

The company was incorporated to avoid consumer credit laws and rules

The FCA only regulates bridging loans if the agreement is between a lender and an individual — they are unregulated if the applicant is a business. So to avoid the Consumer Credit Act 1974, lenders might require the borrower to become incorporated before lending. This lending agreement could become unenforceable, as it’s set up only to evade the consumer credit laws.

If you find yourself in this situation with a lender, you should consult a specialist bridging finance solicitor.

Links between lenders and brokers were not disclosed

Some lenders might work alongside brokers, who will pass on qualified leads in exchange for a fee. If the lender is found to have not disclosed such commission in line with regulatory expectations, they could be fined by the FCA. Therefore, the FCA states  that lenders should prominently disclose the relationship between lender and broker and explain how this relationship affects the consumer financially, if at all.

If you’ve been unknowingly sold a bridging loan through the lender’s sister company, or you have a suspicion that the lender hasn’t disclosed this information, seek advice from your solicitor or Citizens Advice.

The interest rates or T&Cs were too challenging to repay

If, as the consumer, you feel you’ve been a victim of irresponsible lending and your credit has become unaffordable, you might want to speak with your solicitor. The bridging loan lender has a responsibility to ensure they check the affordability of the loan — if it was affordable, to begin with, but your personal circumstances have changed, they should be able to come to a solution.

The lender misrepresented the loan agreement

If your loan has been misrepresented in any way (i.e. they told you something but it wasn’t true), or you just have a suspicion it has been, you should contact Citizens Advice to access free, impartial advice, you’ve lost nothing by talking to someone about your concerns.

Guarantees that are unenforceable

What’s classed as an unenforceable guarantee? Let’s say you were misled when you signed it or were under duress. Both these circumstances could lead the guarantee to become unenforceable. If you’re in this situation, act quickly and consult a solicitor.

Incorrect paperwork that is altered or edited

As you can imagine, if you realise your paperwork has been altered or edited, there are grounds for a complaint. If the paperwork has been altered, it could be the lender is hiding something from you. The Financial Ombudsman Service states that most businesses should respond to complaints within eight weeks. If their response is inadequate, you can take your complaint to them.

The borrower was vulnerable and taken advantage of

The loan lender’s responsibility is to treat all customers fairly and lend responsibly. If the lender knows the borrower cannot afford the loan but lends to them anyway and then charges high late fees or seizes their collateral, you have grounds for a complaint. Or, if the borrower didn’t speak English very well or has limited experience with financial services, you have grounds for a complaint. Consult with a solicitor, or first obtain free, impartial advice from Citizens Advice.

What is my likelihood of winning in court if my bridging loan was mis-sold?

How successful your claim is will depend on the nature of the mis-sold bridging loan. For specific winning forecasts, you’re best approaching your solicitor to get a clear idea.

What qualities should I look for in a solicitor when challenging mis-sold bridging finance?

You should look for a solicitor who has experience in handling mis-sold bridging loans. A bridging loan differs from traditional forms of finance; it’s complex, so you need to work with a solicitor who specialises in bridging finance.

If you’re interested in learning more about bridging finance, dive into our guides section here.