4th November 2015
The two payday lending brands, which were trading names of CashEuroNet UK LLC, have been ordered to pay redress to almost 4,000 customers.
The FCA has been working with the firm since it took over regulation of consumer credit on 1 April 2014.
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.
Of the 3,940 affected customers, 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.
Jonathan Davidson, director of supervision – retail and authorisations at the FCA, says: “We are pleased that CashEuroNet is working with us to address our concerns.
“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.”