The parent company of QuickQuid and Pounds to Pocket has agreed to refund customers who were allowed to take out loans with the companies, which they could not afford to repay.
Up to 4,000 customers are set to receive a refund, which will be for an average of £425 for each person.
The Financial Conduct Authority (FCA) revealed that CashEuroNet, the payday loans companies’ parent company, will pay out £1.7m for compensation. This is after an investigation found that some people were given loans which they weren’t actually able to afford to repay.
The company will handle the issue and contact affected customers within the next three months, so customers do not need to take action.
Jonathan Davidson, the director of supervision, retail and authorisations at the FCA, said: “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.”
This comes just after the parent company of The Money Shop agreed to pay out £15m in compensation. Dollar Financial was accused of similar actions and agreed to pay compensation to nearly 150,000 customers, and they will contact the affected customers just like CashEuroNet will.
