The payday lender Cash Genie may have to pay compensation to customers after it uncovered a string of problems with the way it had imposed charges and collected money from borrowers who were in arrears. The firm, which offers loans of up to £500 at an annual interest rate of 2,986%, told the Financial Conduct Authority (FCA) that it had discovered three matters "that raised serious concerns as to whether customers had been treated fairly".
It said a systems weakness may have meant that unauthorised charges were applied to customers accounts, that it may have misused banking information to collect outstanding debts and that there were a "number of issues" around the way it had allowed customers to extend loans.
The firm, which is registered under the name Ariste Holding Limited and says on its website that it has "helped over 200,000 Britons solve their unexpected cash flow problems from the privacy of their own home", must now conduct a consumer redress scheme to determine if the breaches caused any detriment to customers. If it has, it must compensate anyone who has been affected. The scheme will be headed by a "skilled person" appointed by the FCA.
Recently The Money Shop agreed to repay £700,000 to customers it had given short-term loans to against its own lending policy, while the UK's biggest payday lender, Wonga, was forced to pay £2.6m in compensation to customers who were overcharged or sent threatening letters from fake law firms.
