Payday loans company to pay out £15m in refunds to customers
A major UK payday loans lender is going to refund a total of £15.4m to 147,000 customers, with many of them having been given a loan without being able to afford to repay it.
Dollar Financial UK, who own The Money Shop, Ladder Loans, Payday Express and Payday UK, has agreed to pay out the compensation, after the Financial Conduct Authority (FCA) carried out a review.
This will be the third-largest repayment made by a payday lender over the last few years, and also comes after investigations into Cash Genie and Wonga by the FCA.
The compensation payout is due to issues with the affordability of payday loans that were taken out in the year to April 2015, and repayment collections from loans which were taken out between January 2013 and April 2015.
Approximately 67,000 customers will have their current loan balance reduced, 65,000 will receive a cash refund, whilst 15,000 will have a combination of the two.
“As the new CEO, I accept the findings of the review and apologise to anyone who may have suffered difficulties as a result,” said Stuart Howard, Dollar Financial’s chief executive since November 2014.
“It is proper that we put things right where they have gone wrong and I have gone further than the review in reforming the way our business operates to reflect the company aim of being the most responsible lender in its marketplace.”
The company will contact customers who are owed compensation, even if they have a new address or different bank account information.