For the first time the Financial Conduct Authority (FCA) has banned a key individual from a payday lending firm. Andrew Barry Hart has been prohibited from carrying out any regulated activity, and the firm of which he was sole director, Wage Payment and Payday Loans Limited, has had its interim permission cancelled. The firm used the trading names Payday Overdraft, Wagepayday and Doshloans. The FCA concluded that Mr Hart’s actions demonstrate that he lacks integrity.
Both decisions are to be appealed to the Upper Tribunal.
The regulator found serious issues with Mr Hart and his firm in a number of areas, including:
• Taking repayments in excess of the agreed amounts
• Misleading customers, such as by falsely stating on attempts to collect missed payments that the company had a legal department
• Pressurising clients in arrears into repaying, such as by threatening legal action when none was intended. The firm also failed to issue default notices in the format prescribed by the FCA’s rules
• Not complying with regulatory requirements on credit and affordability checks – not all customers were asked to provide proof of income, in many cases no affordability assessments were carried out, and the affordability assessment procedure he provided to the FCA was in the words of the regulator’s Decision Notice a document “which appears to have been created only a short time before being provided to the Authority”
• Not complying with regulatory requirements on use of Continuous Payment Authority (CPA) – as no records were kept of when CPA was used, there was nothing to prevent staff from making multiple attempts to collect payments in this way
• Incorrect information on loan agreements, such as the information regarding applicable interest rates
• Not taking adequate measures to protect sensitive customer data it was entrusted with, including scanned copies of payslips, bank statements, identity documents and documents used for proof of address such as utility bills
• Inadequate record keeping
• Inadequate complaint handling – there was no documented complaints procedure and no records were kept of complaints received
• Unsatisfactory staff training, especially regarding their knowledge of the rules on how to deal with customers in arrears
All payday lending firms should take note of the reasons why Mr Hart and Wage Payment have been prohibited.
Mr Hart made a number of representations to the FCA. These included an allegation that the regulator “has shown no flexibility and provided no assistance to Mr Hart which could have helped him to run the business compliantly.” Saying this actually made things worse for Mr Hart. The FCA says that the fact he thought the FCA’s role was to provide compliance services to authorised firms gives rise to further concerns over his competence.
He also claimed that he has been made a “scapegoat” and that other firms whose conduct has been worse have been allowed to make changes and continue trading. The FCA responded by saying that other payday lenders against whom action has been taken have been willing to take steps such as acknowledging their failings, agreeing to pay redress, changing policies and procedures and replacing senior management.
Saying that no complaints had been received since 2014, and only one since 2010, also did not help Mr Hart’s case, as the FCA says it believes that he is unable to recognise complaints and has therefore failed to act appropriately in response to expressions of dissatisfaction received more recently.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.