6th January 2016
A payday lender that was forced to pay out £20 million to customers over its unfair practices has gone bust.
Cash Genie entered into liquidation after agreeing a £20 million redress package for 92,000 customers. The company was handed over to liquidator RSM Restructuring Advisory this week but the redress payments to Cash Genie customers would not be affected, said the City regulator, the Financial Conduct Authority (FCA).
Last July, Cash Genie and the FCA reached a redress agreement after the latter found unfair practices spanning six years, including unfair fees – which saw it charge for transfers to its sister company despite not incurring any costs.
It also applied fees and interest to accounts of customers who had not repaid debts after 12 months even though they had not been sent an annual statement of the charges.
The FCA confirmed the company had attempted to contact all customers who were due redress and that customers with outstanding debts should continue to make payments unless they are told to stop.
Customers do not need to apply for redress through a claims company as this would ‘involve the payment of a significant fee relative to the amount of any redress received’.