FCA forces payday lender to pay £1.7m redress

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The firm behind payday loan brands Quick Quid and Pounds to Pocket has reached a deal with the FCA to repay £1.7m to almost 4,000 customers.

CashEuroNet reached the deal after the FCA ordered a skilled persons review of its lending decisions in September 2014.

The review found that customers were able to borrow amounts greater than they could afford to repay.

CashEuroNet has now revised its lending criteria, and identified 3,940 customers who were affected.

Of that total, 2,523 customers will have their loan balance written off, 961 will be paid a cash refund of interest on the unaffordable part of their loans, and 465 will receive both.

The lender plans to complete with redress exercise within 90 days.

FCA director of supervision – retail and authorisations Jonathan Davidson says: “We are pleased that CashEuroNet is working with us to address our concerns.

“It is important that firms carry out appropriate affordability checks and pay particular attention to fair treatment of those who have trouble meeting their loan repayments.”

CashEuroNet is the third payday specialist to agree to pay redress in recent months.

In late October Dollar Financial agreed to pay £15.4m back to customers, while Cash Genie agreed to pay back more than £20m in July.

All three penalties come following the transfer of consumer credit regulation from the Office of Fair Trading to the FCA in April 2014.