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Payday lender to pay £20m redress after FCA intervention

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A payday loans specialist has agreed to write off loans and refund payments worth more than £20m after reaching a deal with the FCA.

Cash Genie will offer the redress to 92,000 customers, writing off charges and interest as well as refunding payments taken without authorisation.

The agreement comes just over a year after the firm approached the regulator to confirm it had engaged in unfair practices.

In July last year, the firm agreed to an independent review of its past business and to carry out a redress scheme. Subsequently Cash Genie reached a deal with the FCA to provide £10m in redress in addition to £10.3m of fees and interest it had already written off.

The FCA found failings at the lender dating back to September 2009, including unfair charges and interest, and refinancing of loans undertaken without explicit requests or permissions from customers.

In addition, the regulator found the firm used banking information provided to sister brands txtmecash.co.uk and paydayiseveryday.co.uk to take payment for existing Cash Genie loans without consent from customers.

FCA acting director of supervision – retail and authorisations Linda Woodall says: “We have been encouraged that Cash Genie has been working with us proactively and openly to put things right for its customers after these issues were reported.

“Although standards in the consumer credit sector are improving, it is disappointing that examples of poor practice in the payday market keep surfacing. We expect all firms to notify us of any unacceptable past or current practices and provide appropriate redress to anyone affected.”

Last October the FCA reached a deal with Wonga that saw the lender write off 330,000 customer’s loans.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. This hardly comes as any surprise! What should have happened is the Regulator should have stamped upon any payday loan companies before they started. It was crystal clear that the rates being applied left anyone in the field of financial services knowing that it was only going to add financial pain over the long-term to anyone applying…

  2. @ Greg – except, of course, (1) there was NO regulator for this business before April last year, and (2) the former Secretary of State for Business Innovation & Skills decreed that payday lending was not inherently bad and should be allowed to continue in the UK rather than being banned outright.

    But I doubt it fits your world-view that the FCA intervenes effectively to help consumers.

  3. I do wonder how hard they will work at making sure they customers get the redress they are entitled to. The Equitable Life fiasco still rumbles on so many years after the event with over 200,000 policy holders STILL not having been dealt with because NS&I do not know where they are.

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