The payday lender scandal continues. The latest high-cost credit company to be fined is Dollar Financial, which has been forced to repay more than £ 15.4million to 147,000 customers.
After an investigation into the company, the City Watchdog ruled that between April 2014 and April 2015 – after the entry into force of new strict lending rules – dollar customers “may have suffered prejudice as a result of credit checks. business affordability, debt collection practices and systems errors “. .
In short, many were loaned more than they could afford to repay. The company – which owns the chain of stores The Money Shop, as well as online lending companies Payday UK, Payday Express and Ladder Loans – has now had to change its lending criteria to meet Financial Conduct Authority rules for lenders short term at high cost.
Jonathan Davidson, director of oversight of the regulator, said: “The FCA expects all credit providers to carry out appropriate checks to ensure that borrowers do not accept more than they can afford. to repay.
Wonga and Cash Genie have also been pressured into repaying cash to abused customers over the past year and there is likely to be more action, said Mike O’Connor, Managing Director of StepChange Debt Charity. “As the number of people coming to us with payday loan debt issues decreases, we continue to see issues with unaffordable loans and people with multiple loans.
“We need better forms of credit to help people when they need it, better precautionary savings measures to help households build financial resilience, and better protections for people when they run into hard times. “
Carl Packman, author of a book on payday loans, said: “The news confirms what many critics have known for some time about the payday lending industry: for payday loans to grow as they do. have done during the recession years, it was necessary to rip off people struggling with their finances.
What should I do if I am owed money?
If you are owed money, you shouldn’t have to do anything to get your money back. Dollar will begin contacting customers immediately and plans to issue all refunds by early 2016, including tracing people who have changed their contact details or bank account information. More information can be found on The Money Shop, Payday UK, Payday Express and Ladder Loans websites.
How much will I get?
The exact amount of repair that each customer will get will be assessed on a case-by-case basis. Some 65,000 clients will receive a cash refund while 67,000 will have their current loan balances reduced. During this time, 15,000 clients will receive a cash refund and a reduction in their loan balance.