Payday Lender Ordered to Repay £34m to Borrowers
September 21, 2016
A payday lending company has been ordered by the Financial Conduct Authority (FCA) to repay £34 million to its customers after being found guilty of persistently deploying “unfair practices”.
The financial services industry’s primary regulator has revealed that CFO Lending misused its customers’ banking details to take their money without permission and failed to treat customers in financial difficulty with appropriate fairness.
According to the FCA, CFO Lending, which traded variously as Payday First, Money Resolve, Payday Credit, Payday Advance and Flexible First, has also been guilty of sending threatening letters, emails and text messages to borrowers in debt around the UK.
Other issues for the FCA in the company’s behaviour between 2009 and 2014 include its practice of “routinely reporting inaccurate information about customers to credit reference agencies”.
Plus, some of its almost 100,000 British customers were apparently refused the opportunity to repay their debts on the basis of “reasonable repayment plans suggested by customers and their advisers”.
Having been the subject of an investigation by the FCA in the months leading up to August 2014, CFO Lending was told it could no longer issue new loans and is now set to write off millions of pounds worth of debts and make £2.9 million in cash repayments to customers.
“We discovered that CFO lending was treating its customers unfairly and we made sure that they immediately stopped their unfair practices,” explained Jonathan Davidson, director of supervision within the retail and authorisations department of the FCA.
“Part of addressing these mistakes is making sure they put things right for their customers with a redress programme,” he said.
Davidson also said that customers of CFO Lending do not need to take any action in relation to the company’s redress initiatives and that anyone due to be affected by them will be contacted by March 2017.
Payday loans usually involve very high levels of interest and have been a major source of personal debt problems and financial difficulties for many thousands of people in Scotland and throughout the UK in recent years.
If you live in Scotland and are struggling with personal debt problems then Scotland Debt Solutions can help. Contact one of our advisors directly to arrange a free and confidential consultation.
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