How NewDay Ltd Weaponises the PayDown Plan Against Responsible Borrowers
— Justice-Focused Advocate for Financial Accountability
This week, I received a letter from NewDay Ltd informing me without consent that I had been placed on their PayDown repayment plan for the maximum term of 48 months. No discussion, no transparency, no terms and conditions and no acknowledgement of the fact that I had already offered £200 per month—nearly 2 times the minimum payment required.
At first glance, this might seem like a helpful structure. But when you look closer, it’s a system designed to trap responsible borrowers into paying unnecessary interest, all while NewDay Ltd postures as adhering to Financial Conduct Authority (FCA) guidelines on “persistent debt.”
Let me break this down.
The Hidden Trap of the PayDown Plan
The PayDown Plan is marketed as a solution for customers in persistent debt. But here’s what that often means in practice:
- Automatic assignment to a 48-month plan, even for those offering payments that would repay the balance in half the time.
- No consent or negotiation before extending the repayment term.
- Substantially more interest accrued, despite a borrower’s willingness to pay more upfront.
In my case, £200/month would clear the balance in under 24 months. Yet, by forcing the 48-month route, NewDay locks in years of profit from interest—profit that comes directly at the consumer’s expense.
What the FCA Actually Says
Contrary to NewDay Ltd’s actions, the FCA’s Consumer Credit Sourcebook (CONC) guidelines call for:
- Reasonable repayment periods: typically 36–48 months only in exceptional cases
- Plans that do not financially disadvantage the consumer
- Full transparency and informed consent when setting repayment terms
Under Principle 6, firms must “pay due regard to the interests of its customers and treat them fairly.” Automating a maximum-length repayment schedule to extract maximum interest? That’s the opposite of fair treatment.
Why This Matters Beyond One Account
This isn’t just about me it’s about how NewDay Ltd systematically monetizes responsible repayment. It’s a broader pattern of:
- Exploiting anti-persistent debt rules to extend profit windows
- Presenting longer plans as helpful, while ignoring affordable faster alternatives
- Potentially breaching regulatory standards without clear consumer recourse
If you’ve been placed on a PayDown plan without consent, especially if you were already paying down your balance at a healthy rate, you have the right to challenge the decision, report it to regulators, and demand a return to your original agreement.
What You Can Do
- Challenge the assignment: Demand written confirmation that you are not bound to the 48-month term and can continue your own repayment schedule.
- File complaints with the Financial Ombudsman Service (FOS) and Financial Conduct Authority (FCA) highlighting breaches of fairness, consent, and interest manipulation.
- Spread the word: Share this post and encourage others to scrutinize their own PayDown plans. Don’t let this abuse stay hidden behind jargon and corporate spin.
The Fight for Accountability
Financial reform begins when we call out the systems that exploit our trust. NewDay Ltd might hide behind terms and conditions, but fairness is not buried in the fine print—it’s measured by how a company treats its customers.
Let’s expose this. Let’s demand change. Let’s make sure responsibility is rewarded, not penalized.
