Reviewed: 6th January 2016
A payday lending company trading as Cash Genie has entered solvent liquidation proceedings six months after it was told by the UK’s financial services regulator that it should pay out £20 million to 92,000 of its customers.
The business was deemed to have fallen foul of financial industry rules in July 2015 and was told it must make amends for engaging in “unfair practices” by wiping out debts and issuing payments to thousands of its UK consumers.
“A number of serious failings took place at the firm which caused detriment for many customers. Failings date back to the launch of Cash Genie in September 2009,” the Financial Conduct Authority (FCA) said in a statement.
The FCA has been clamping down on some of the more questionable activities of payday lenders throughout the UK in recent months with company’s behind some of the best-known brands in the industry being obliged to issue refunds to thousands of their customers in 2015.
Furthermore, back in 2014, the FCA reached an agreement with Wonga that saw the payday lender obliged to pay back £2.6 million to 45,000 of its UK customers to address what the regulator referred to as being “very serious” misconduct.
In the case of Cash Genie, the company voluntary informed the FCA that it had engaged in unfair practices in June 2015.
This admission led to an independent review and the creation of a redress scheme designed to facilitate the payment of £10 million to the lender’s unfairly treated customers.
Prior to the introduction of the redress scheme, Cash Genie had already written off some £10.3 million worth of fees and interest in relation to money borrowed by its customers.
“Although standards in the consumer credit sector are improving, it is disappointing that examples of poor practice in the payday market keep surfacing,” said Linda Woodall from the FCA in July 2015 after details of Cash Genie’s “unfair” practices emerged.
Cash Genie was found to have been charging its customers fees and interest payments for switching customer debts from one debt collection agency to another, despite no costs being incurred by the company as a result of these processes.
The FCA also found that the company was guilty of refinancing loans without customers’ consent and of charging fees they were not entitled to charge under the terms of customer contracts. Our extensive office network comprises 76 offices across the UK with a partner-led service offering immediate director advice and support.