FCA compensation order good for customers, says Citizens Advice
Citizens Advice has welcomed a decision that Dollar Financial UK will refund £15.4million to 147,000 customers.
The company, which owns payday loan brands like The Money Shop, gave loans to borrowers who in some cases could not afford to repay.
The company agreed compensation after a review by the Financial Conduct Authority (FCA). It follows previous investigations that led to Wonga and Cash Genie both repaying customers.
Gillian Guy, Chief Executive of Citizens Advice, said:
“A lack of checks by payday lenders trapped many borrowers in dangerous debts.
“Dollar Financial UK is the latest company to agree to repay customers which shows problems with payday loans were widespread. The products themselves and the protections around them were wholly inadequate.
“It is good the FCA has again targetted this type of behaviour and that customers will be refunded. The regulator must also make sure other risky products, like logbook and guarantor loans, are properly policed so that they don’t become the next payday loans.
“It is also crucial the Government ensures people can get independent advice, guidance and support on how to manage their finances and prevent problems arising in the first place.”
Notes to editors
- The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
- The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- To get advice online or find your local bureau in England and Wales, visit citizensadvice.org.uk
- You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
- Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.