Payday lending firm Ariste Holding Limited is to pay over £20 million in redress to its customers. The firm voluntarily notified the Financial Conduct Authority (FCA) regarding issues with the firm’s fee charging practices and its stance on rolling over loans.
Ariste Holding most commonly used the trading name Cash Genie, although it has also traded as www.txtmecash.co.uk and www.paydayiseveryday.co.uk. The issues that are the subject of this redress date right back to when the company started trading in September 2009, and in some cases the practices continued until early 2014.
Cash Genie’s unfair practices included:
• Charging customers £50 to have their debts transferred to Twyford Developments Ltd, trading as Carter Forbes, even though this is a sister firm and no costs were incurred by making the transfer
• Rolling over and re-financing loans without customers’ consent, and without conducting the necessary affordability checks
• Using banking details supplied when customers applied via the www.txtmecash.co.uk and www.paydayiseveryday.co.uk websites to collect sums owed on Cash Genie loans, without the customer’s consent
• Applying additional fees for customers who had not repaid after 12 months, even though the required annual statement had not been provided
Cash Genie will now take the following steps to compensate affected customers:
• Write off fees and charges incorrectly applied, or taken without authorisation
• Write off or refund rollover interest if the action to roll over the loan was inappropriate
• Where refund payments were taken without authorisation, write off the entire loan
• Write off interest and fees charged after the point at which the annual statement should have been provided
Cash Genie has already voluntarily written off £10.3 million of fees and interest, and will now make additional redress payments totalling £10 million to some 92,000 customers (some of the payments will be made in the form of write offs rather than cash payments). Affected customers will be contacted by the firm by September 2015 at the latest.
Linda Woodall, Acting Director of Supervision – Retail and Authorisations at the FCA said:
“We have been encouraged that Cash Genie has been working with us proactively and openly to put things right for its customers after these issues were reported. Although standards in the consumer credit sector are improving, it is disappointing that examples of poor practice in the payday market keep surfacing. We expect all firms to notify us of any unacceptable past or current practices and provide appropriate redress to anyone affected.”
The firm has not offered new loans since September 2014 and its parent firm has confirmed that it will not be re-entering the market.
This serves as a further reminder to payday lenders – following similar FCA actions against Wonga, Dollar Financial and The Cheque Centre – that they are under scrutiny from the regulator. They cannot charge fees that: exceed the charge caps, exceed the costs incurred by providing the service that the fee covers, or which have not been clearly explained to customers in the first place. They cannot roll over a loan unless it is demonstrably in the customer’s interest to do so, and in any case cannot roll over a loan more than twice.
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.