A payday lender has been told to give back millions of pounds to customers because its lending practices were deemed unfair by the financial regulator.
After it found "serious failings" at the lender, the Financial Conduct Authority (FCA) told Cash Genie to repay £10m to customers – after it's already waived fees and interest totaling £10.3m.
The regulator launched an investigation after it was informed by CashGenie itself about its practices. The investigation found several failings dating back to 2009.
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That included loans being refinanced or rolled over without the permission of customers or checks of their financial situations; customer payments being taken by Cash Genie after they applied for loans from other payday loan brands run by the same company, Ariste Holding; and failing to send yearly statements to customers, meaning it should not have applied further fees or interest on the loans.
"We have been encouraged that Cash Genie has been working with us proactively and openly to put things right for its customers after these issues were reported," said the FCA's acting supervision director Linda Woodall.
"Although standards in the consumer credit sector are improving, it is disappointing that examples of poor practice in the payday market keep surfacing. We expect all firms to notify us of any unacceptable past or current practices and provide appropriate redress to anyone affected.”
Cash Genie will now aim to repay the 92,000 customers affected by 18 September. Customers also include those who applied for loans with www.txtmecash.co.uk and www.paydayiseveryday.co.uk, also run by Ariste Holding.
EZ Corp, the US parent company of Cash Genie based in Austin, Texas, announced it was leaving the beleaguered payday loans business in the UK.