Payday lender Cash Genie to pay £20m compensation

Payday lender Cash Genie will provide £20m in redress to more than 92,000 customers, after the regulator discovered failures in its debt collection and communication practices.

Cash Genie also piled on fees and interest to customers, which were found to be at unfair levels by the regulator Financial Conduct Authority (FCA). In some cases, they will receive both.

A Treasury spokesman said: ‘The action announced today is exactly why we created the FCA.’.

The firm charged fees which it was not entitled to under its customer contracts.

Cash Genie will now write off or refund fees and charges that shouldn’t have been added to customer accounts and interest where it rolled over customers’ loans inappropriately. For example, it charged £50 to transfer customers to its sister debt collection firm, Twyford Developments (trading as Carter Forbes) even though it incurred no extra costs.

As a result of the review, it has agreed to provide £10m in redress.

If you have not heard anything by September 18, call Cash Genie on 0333 366 0023.

Loans were rolled over or refinanced without customers’ requesting this or their consent and without undertaking appropriate checks or assessments of customers’ situations.

Ariste Holdings, the company behind Cash Genie, also traded as www.txtmecash.co.uk and www.paydayiseveryday.co.uk. Customers were falsely told loans with these other brands were pre-approved.

Cash Genie said affected customers will either have the amount they owe reduced or will receive a cash payment.

“Although standards in the consumer credit sector are improving, it is disappointing that examples of poor practice in the payday market keep surfacing”, Woodall said. This means that it should not subsequently have applied further fees or interest to accounts.

Payments taken without authorisation will be refunded and all outstanding balances on accounts affected by this practice will be written off.

The watchdog has been investigating the trading practices of the company since it voluntarily notified the FCA that it had engaged in unfair practices.

This is Money has contacted Cash Genie for comment, but had no reply at the time of publication.

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.