CashEuroNet, the company that owns and operates the payday lenders QuickQuid and Pounds to Pocket, has agreed to refund a total of £1.7 million to thousands of its customers around the UK.
The company has agreed to provide the refunds after a Financial Conduct Authority (FCA) investigation concluded that many of its customers had been given access to loans they had no means of paying back.
A similar investigation carried out by the UK’s financial services regulator revealed recently that Dollar Financial, the company that owns The Money Shop, another major British payday lender, has also been guilty of handing out loans without carrying out adequate affordability checks.
At £1.7 million, the amount of money set to be refunded by CashEuroNet in the coming weeks is considerably lower than the £15 million that Dollar Financial has recently been obliged to repay.
Nonetheless, the news that another payday lender has been clamped down upon by the FCA will be welcomed by critics of such lenders and by the thousands of people set to be refunded.
According to the FCA, there are around 4,000 British consumers in line to receive some form of refund from CashEuroNet, with just over 2,500 people set to see their outstanding loan balances with the company written off.
For its part, CashEuroNet has been working with the FCA to ensure that the affordability checks it carries out in relation to payday loan applications are considerably more stringent going forward.
“We are pleased that CashEuroNet is working with us to address our concerns,” said Jonathan Davidson, director of supervision – retail and authorisations at the FCA.
“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.”
The FCA has said that people potentially in line to receive a refund from CashEuroNet in relation to loans taken out with QuickQuid or Pounds to Pocket should wait to be contacted on the issue rather than take any action themselves.
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