Payday lender faces £20m redress after FCA review

In June 2014, Cash Genie voluntarily notified the FCA that it had engaged in unfair practices. In July 2014, the firm agreed to an independent review of its past business and to carry out a redress scheme. As a result of the review, it has agreed to provide £10 million in redress. The firm had already voluntarily written off £10.3m of fees and interest.

An FCA statement said that a "number of serious failings took place which caused detriment for many customers".

The FCA reported that Cash Genie charged fees and interest which were unfair, including charging £50 to transfer customers to its sister debt collection firm, Twyford Developments Ltd, trading as Carter Forbes, even though it incurred no additional costs.

Additionally, loans were rolled over or refinanced without customers’ explicit request or consent and without undertaking appropriate checks or assessments of customers’ situations.

Ariste Holding Limited also traded under the brands www.txtmecash.co.uk and www.paydayiseveryday.co.uk. Banking information which customers had provided to these websites when they applied for a loan was used to take payment for existing Cash Genie loans without customers’ informed consent. In a significant number of these cases customers were encouraged to apply to these websites for loans and give their banking details under the false pretence that the loan had been pre-approved.

Cash Genie failed to send annual statements to customers who had not repaid their loans after 12 months, and therefore should not subsequently have applied further fees or interest to accounts.

Linda Woodall, Acting Director of Supervision – Retail and Authorisations at the FCA said:

“We have been encouraged that Cash Genie has been working with us proactively and openly to put things right for its customers after these issues were reported.

"Although standards in the consumer credit sector are improving, it is disappointing that examples of poor practice in the payday market keep surfacing. We expect all firms to notify us of any unacceptable past or current practices and provide appropriate redress to anyone affected.”