Payday lender in £15m FCA redress deal

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Payday lender Dollar Financial UK has agreed to hand back £15.4m to customers following an agreement with the FCA.

The firm, which trades as The Money Shop, Payday UK, Payday Express and Ladder Loans, will refund the money to over 147,000 customers.

It comes after a skilled persons review of Dollar’s lending decisions, which found that between April 2014 and April 2015, customers were lent more than they could afford to repay.

Dollar has since agreed to make changes to its lending criteria.

FCA director of supervision for retail and authorisations Jonathan Davidson says: “The FCA expects all credit providers to carry out proper checks to ensure that borrowers don’t take on more than they can afford to pay back. We are encouraged that Dollar is committed to putting things right for its customers.”

The terms of the deal will see 65,000 customers offered cash refunds, while a further 67,000 will have their loan balances reduced, and 15,000 will receive both.

Dollar will start contacting customers immediately and plans to complete the redress exercise by early 2016.

In July, fellow payday loans firm Cash Genie agreed to pay £20m in redress to customers after the firm approached the regulator to confirm it had engaged in unfair practices on charges and interest, and refinancing of loans undertaken without explicit requests or permissions from customers.