Payday lender Cheque Centre has permanently exited the single instalment payday loan market and has suspended debt collection calls following action by the FCA.
The lender will no longer sell loans which must be repaid in one lump sum.
In a voluntary arrangement with the FCA, Cheque Centre has also suspended debt collection calls to customers until it has reviewed and improved its processes, and has agreed to amend its policies and procedures to ensure they are fully aligned with the FCA’s rules.
In addition, the firm will retrain its staff on treating customers fairly.
The FCA says poor practice at the lender was identified by the Office of Fair Trading, which regulated the consumer credit sector until 1 April.
In late March Cheque Centre was sent a letter setting out the FCA and OFT’s “serious concerns”.
FCA chief executive Martin Wheatley says: “This is an early victory for people that use payday lenders. We made our tougher expectations clear to Cheque Centre and they have wasted no time in making changes.
“I have said before that firms would need to dramatically improve their operation or exit the market, and we are now seeing that happening.
“This is an important step in the right direction and other payday lenders should take note.”
Cheque Centre will be required to carry out a skilled persons review to ensure the necessary improvements have been made.
The lender has 451 branches across the UK.
A Cheque Centre spokesman says: “The FCA made clear their expectations under the new rules and we offered to make immediate changes. One of the decisions we made was to accelerate our exit from payday lending. The transfer to the new regulator was the perfect time to make the change and we are now out of the payday market.
“We are also listening to our customers, and in the future we are going to concentrate on our significant foreign currency business, new and existing longer-term loan products as well as traditional pawnbroking services.”