Ariste Holding Limited, trading as Cash Genie, has entered into an agreement with the Financial Conduct Authority to provide over £20m of redress to more than 92,000 customers for unfair practices.
Last June, Cash Genie voluntarily notified the FCA that it had engaged in unfair practices, agreeing to an independent review of its past business the following month. As a result, it agreed to provide £10m in redress, having already voluntarily written off £10.3m of fees and interest.
A number of serious failings took place which caused detriment for many customers, according to the regulator, dating back to the launch of Cash Genie in September 2009.
These include charging fees and interest which were unfair. 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 additional costs.
Loans were also rolled over or refinanced without customers’ explicit request or consent and without undertaking appropriate checks or assessments of customers’ situations.
Ariste Holding traded under the brands txtmecash.co.uk and paydayiseveryday.co.uk, with banking information provided to these websites then used to take payment for existing Cash Genie loans without customers’ informed consent.
Cash Genie also failed to send annual statements to customers who had not repaid their loans after 12 months, meaning it should not subsequently have applied further fees or interest to accounts.
Linda Woodall, acting director of supervision for retail and authorisations at the FCA, said she was encouraged that Cash Genie worked 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 redress package will consist of a combination of cash refunds and balance write downs.
Cash Genie has agreed to write off or refund fees and charges which should not have been added to customer accounts; write off or refund rollover interest where the firm rolled over customers’ loans inappropriately; refund payments taken without authorisation; and write off or refund interest and fees added to customers’ accounts after the point at which the firm should have provided customers with an annual statement.
The firm is aiming to contact all affected customers by 18 September.
peter.walker@ft.com
