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Payday lender Cash Genie to pay £20m compensation Payday lender Cash Genie to pay £20m compensation
(35 minutes later)
Payday lender Cash Genie is to pay a total of £20m in compensation after charging customers £50 to transfer them to the firm's debt collection business. Payday lender Cash Genie faces a £20m compensation bill after charging customers £50 to transfer them to the firm's debt collection business.
This was one of a series of "unfair" fees and interest levies imposed by the firm after it launched in 2009, the Financial Conduct Authority said. This was one of a series of "unfair" fees and interest levies imposed by the firm after it launched in 2009, the Financial Conduct Authority (FCA) said.
Cash Genie has now agreed with the regulator to pay compensation to more than 92,000 customers.Cash Genie has now agreed with the regulator to pay compensation to more than 92,000 customers.
The lender, owned by Ariste Holding, said nobody was available to comment.The lender, owned by Ariste Holding, said nobody was available to comment.
The company has published details of the redress scheme on its website.The company has published details of the redress scheme on its website.
Unauthorised payments
The regulator, the FCA, said that "serious failings" by the lender included:
Any customers owed compensation will be contacted by Cash Genie by 18 September.
Some £10m will be paid in compensation, with an additional £10.3m in fees and interest already written off.
Compensation will be paid either through cash refunds, or reduction of existing debt.
Withdrawal
Cash Genie stopped offering new payday loans to customers in September 2014, three months after referring itself to the regulator.
Its US-based parent firm, EZCORP, announced shortly afterwards that it would leave the UK payday lending market in 2015.
It is one of a number of firms to leave the UK payday market which is now under stricter regulatory rules, including a cap on interest charges and a limit on rollovers.
"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, of the FCA.
"We expect all firms to notify us of any unacceptable past or current practices and provide appropriate redress to anyone affected."
The Financial Ombudsman Service said that it had seen a significant increase in the number of complaints about payday lending in the last few years.
The service, which rules on complaints that cannot be resolved between a company and its customer, said it was investigating about 150 new cases each month.