Dollar Financial United Kingdom has agreed an approach with the FCA to provide redress to affected customers.
Advertisement
Dollar Financial United Kingdom – trading as The Money Shop, Payday United Kingdom, Payday Express and Ladder Loans – has agreed to refund over £15.4m to 147,000 customers who may have suffered detriment as a result of the firm’s poor affordability checks, debt collection practices and systems errors. Bosses have also promised to change the way they operate so they meet the FCA’s standards for high-cost, short-term lenders.
A payday loans firm is being forced to pay back more than £15m to customers.
Stuart Howard, chief executive of Dollar Financial, said: “As the new chief executive, I accept the findings of the review and apologise to anyone who may have suffered difficulties as a result. We are encouraged that Dollar are committed to putting things right”.
The FCA said that customers do not need to take any action. Customers are advised to maintain any existing agreements until contacted.
Compensation relates to the affordability of loans taken out in the year to April 2015, as well as the collection of repayments on loans taken out between January 2013 and the end of April 2015.
The amount of redress each customer receives will be determined on a case-by-case basis.
It will now refund 65,000 customers, reduce the loan balance of 67,000 others and offer both a refund and loan reduction to a further 15,000. Affected customers will not need to apply for redress.
Customers have been told they don’t need to take any action themselves.
In July another payday lender, Cash Genie, was told to repay £20m after the FCA found unfair lending practices.
‘It more than justifies the new tough rules and regulatory attention that firms like The Money Shop have received and warns us that controversy in this industry is not over yet.
“While the number of people coming to us with payday loan debt problems is falling, we continue to see problems with unaffordable lending and people struggling with multiple loans”.
Advertisement
The Money Shop – the most familiar of Dollar’s names – is heavily advertised on television and also has a high street presence, offering foreign exchange, pawnbroking services and Western Union money transfers, as well as payday loans over the counter.
