Money, debt and banking in England: loans, debt letters and bank complaints

For two people or businesses who have agreed to end a dispute — over money, goods, work done, damage or a deposit — by one paying the other an agreed sum. The agreement records the payment and when it is due, that once paid it settles all claims about the dispute, that neither side admits liability, and that each bears its own costs. It is not for a dispute with an employer: an employee's claims are settled only by an agreement made after independent advice, or through Acas. Both sign it; each keeps a copy.

For a customer who wants to close a current account with a bank or building society. Under regulation 51 of the Payment Services Regulations 2017 you can end a current account at any time, subject to a notice period of up to one month if your terms set one, and closing is free once the account has been open for six months. The letter asks the bank to close the account, cancel cards and payments, pay the remaining balance to another account and confirm the closure in writing. Most banks also close accounts free in the app, by phone or in a branch.

For a personal customer tricked into sending money by bank transfer to a fraudster — a fake investment, a purchase that never existed, a caller pretending to be the bank or the police. Under the reimbursement rules for authorised push payment scams, your bank must normally refund payments made by Faster Payments or CHAPS since 7 October 2024, up to £85,000, if you claim within 13 months of the last payment. The letter makes the claim in writing and asks for a decision; if refused, the Financial Ombudsman Service is free.

For a debtor who confirms in writing how much they owe a creditor, and for the creditor who asks for it — a private loan, unpaid rent, money owed between friends or businesses. Signed by the debtor, it is an acknowledgement under sections 29 and 30 of the Limitation Act 1980, so the six-year limitation period starts again from its date; a debt that is already statute-barred is not revived. An optional plan sets monthly instalments. The debtor signs; the creditor keeps the original.

For someone chased by a debt collector or debt buyer for a debt they do not recognise, dispute or believe is more than six years old. The letter does not acknowledge the debt: it asks for proof — the agreement, a statement of account, the default notice and the assignment — or states that the debt is statute-barred under the Limitation Act 1980 and will not be paid, which FCA rules require a firm collecting a regulated credit debt to respect. Send it first class with a free certificate of posting, and keep a copy.

For anyone in England, Wales or Scotland with a workplace or personal pension who wants to know what it is worth, or has lost touch with the scheme after moving house or changing job. A letter to the scheme administrator or provider asking for a statement of your benefits under the pension disclosure regulations of 2013 — the value built up, any transfer value and the date you can take it — and updating your address. Posted first class. Find a lost scheme's contact details free with the Pension Tracing Service on GOV.UK.

For a borrower or customer who cannot keep up with a loan, credit card, overdraft or bill after a change such as job loss, illness or a cut in income. The letter explains what has changed, offers a monthly payment you can afford and asks the creditor to accept it, freeze interest and charges, and confirm in writing. FCA rules require lenders to treat customers in financial difficulty with forbearance. Free debt advice is also available from MoneyHelper, StepChange and Citizens Advice anywhere in the UK, from National Debtline in Great Britain, and from Advice Direct Scotland and Advice NI. Send it by email and by first class post.

For two private individuals — relatives, friends, a couple — lending money to each other, with or without interest. The agreement records the amount and when it was paid over, the interest if any, the final repayment date or monthly instalments, and what happens if a payment is missed. A loan between private people, not made in the course of a business, needs no FCA authorisation, falls outside most of the Consumer Credit Act 1974 and needs no registration or stamp duty. Both sign it, and each keeps a signed copy.

For a borrower with a loan, credit card, store card or catalogue account regulated by the Consumer Credit Act 1974 who wants a copy of the agreement and a statement of the account. Under section 77 (fixed-sum credit such as a loan) or section 78 (running-account credit such as a credit card), the creditor must send them within 12 working days of a written request with a £1 fee; while it fails to, it cannot enforce the agreement. Send it with the fee, first class with a certificate of posting.

For a private individual owed money by another individual — an unrepaid loan, a share of a bill, money paid for something never handed over. The letter sets out the debt and gives 14 days to pay or reply, as the Practice Direction on Pre-Action Conduct expects, and says you will otherwise claim in the County Court through Money Claim Online. It is not the letter of claim a business sends an individual, which follows the Pre-Action Protocol for Debt Claims. Send it first class with a certificate of posting, and by email.

For a customer with a complaint about a bank, building society, credit card company, lender, pension or investment firm — a charge, a refused or wrong payment, poor service, a mistake or a mis-sold product. The letter is the formal complaint the FCA's rules require the firm to answer: within 15 business days for most payment-services complaints, and within eight weeks otherwise. After its final response, or once the time has passed, you can take it free to the Financial Ombudsman Service within six months.

For a borrower who was given a loan, credit card, overdraft limit, car finance or catalogue credit they could not repay without hardship. FCA rules require a lender to check creditworthiness and affordability before lending or raising a limit (CONC 5). The letter complains that the checks were not proportionate, sets out your finances at the time, and asks for interest and charges to be refunded and your credit file corrected. The lender has eight weeks; then the Financial Ombudsman Service is free.

For a customer who has cancelled a Direct Debit or standing order with their bank — usually in online banking, free and at once — and needs to tell the company it paid. Cancelling the payment does not end a contract or a debt, so the letter states your position: the contract has ended, you will pay another way, or you dispute the charges. Under the Direct Debit Guarantee, your bank refunds at once any payment taken in error. Send it by email and by first class post.