Cash Genie, operated by Ariste Holding Limited, has agreed to pay over £20 million to over 92,000 former customers for unfair business practices.
According to the Financial Conduct Authority (FCA), Cash Genie charged fees and interest which were unfair. The FCA gave the example of Cash Genie charging £50 to transfer customers to its sister debt collection firm Twyford Developments (trading as Carter Forbes) even though it incurred no charge. Cash Genie also charged inappropriate fees to their customers. Loans were said to be rolled over without customer consent. Banking information provided by customers was used for payments without the explicit agreement of customers. The FCA also stated;
“In a significant number of these cases customers were encouraged to apply to these websites for loans and give their banking details under the false pretence that the loan had been pre-approved.”
These “failings” date back to the launch of Cash Genie in September of 2009. Cash Genie is pretty much the poster child for bad lending practices.
In June 2014, Cash Genie voluntarily notified the FCA that it had engaged in unfair practices. In July 2014, the firm agreed to an independent review of its past business and to carry out a redress scheme. As a result of the review, it has agreed to provide £10 million in redress. The firm had already voluntarily written off £10.3m of fees and interest.
A number of serious failings took place which caused detriment for many customers. Failings date back to the launch of Cash Genie in September 2009.
“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,” said Linda Woodall, Acting Director of Supervision at the FCA.
“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 FCA said customers do not need to take any action as Cash Genie will be contacted all customers affected by September 2015.
Cash Genie stopped offering new loans in September 2014. Its parent firm, US-based EZCORP, announced last year that Cash Genie would exit the UK payday lending market in 2015.
Consumers interested in additional information may visit the FCA site.