CashEuroNet UK, trading as Quick Quid and Pounds to Pocket, has agreed with the Financial Conduct Authority (FCA) to provide redress to almost 4,000 customers to the value of £1.7 million.
This follows concerns raised by the FCA about the firm’s lending criteria.
An independent Skilled Person was appointed in September 2014 to review CashEuroNet’s lending decisions which revealed that some customers were able to borrow amounts greater than they could afford to repay.
The firm has now made changes to its lending criteria and has reassessed all loans that have been granted since 1 April 2014 and which were in arrears for 30 days or more against the new criteria. As a result of this exercise the firm identified a group of customers who were lent sums in excess of what they could afford to repay.
The 3,940 affected customers will receive redress totaling £1.7 million. 2523 customers will have their current loan balance written off; 961 customers will be paid a cash refund of interest paid on the unaffordable element of the loan and 456 customers will receive both a cash refund and have their current loan balance written off.
“We are pleased that CashEuroNet is working with us to address our concerns,” said Jonathan Davidson, director of supervision – retail and authorisations at the FCA.
“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 will start contacting customers immediately and plans to complete the redress exercise within the next 60 to 90 days.
10 days ago, Dollar Financial UK, which trades as The Money Shop, Payday UK, Payday Express and Ladder Loans, agreed with the FCA to refund over £15.4 million to 147,000 customers.