In July 2014, the FCA appointed a Skilled Person to review Dollar’s lending decisions, including whether customers were being treated fairly and were only lent sums that they could afford to repay. The Skilled Person also asked customers about their borrowing experiences.
The review revealed that many customers were lent more than they could afford to repay. The firm has since agreed to make a number of changes to its lending criteria in order to meet the FCA’s requirements for high-cost short-term lenders.
65,000 customers will receive a cash refund, 67,000 customers will have their current loan balance reduced, and 15,000 customers will receive both a cash refund and a reduction in their loan balance.
Former FCA director of communications Zitah McMillan joined Dollar Financial's parent company, DFC Global Corp, as international chief executive in March.
She left the FCA alongside Clive Adamson in December following the release of a report criticising executives over a blunder that affected insurance companies' share prices.
Dollar Financial - DFC Global's UK arm - includes Payday UK, Payday Express, The Money Shop and Ladder Loans, and is the UK’s second largest payday lender. However it already came under fire from the FCA last year and was ordered to refund a total of £700,000 to customers after it approved loans outside its lending criteria.
Jonathan Davidson, Director of Supervision - Retail and Authorisations at the FCA said:
“The FCA expects all credit providers to carry out proper checks to ensure that borrowers don’t take on more than they can afford to pay back. We are encouraged that Dollar is committed to putting things right for its customers.”