Britain’s largest payday lender QuickQuid has collapsed into administration, throwing millions of customers into financial uncertainty.
Customers have been warned to keep repaying their loans, otherwise they could damage their credit score or face additional fees.
The owner of QuidQuick, the US company Enova, has confirmed its intention to leave the UK market, after receiving more than 3,000 complaints in the first six months of the year.
The news comes just over a year after Wonga – at the time the UK’s largest short-term lender – filed for bankruptcy following a surge in customer compensation claims.
Grant Thornton, who manages Wonga’s administration, has been appointed to take on the same role at CashEuroNet, which operates the QuickQuid and On Stride brands.
The administrator confirmed that there would be no new loans from the company and that customers would have to continue making their payments as usual.
Are you owed a payday loan repayment?
MILLIONS of payday loan customers can be repaid.
Repayment or compensation is often given when the loan has been mis-sold or when affordability checks were not strict enough. Here’s all you need to know:
- Customers who have paid off their payday loan debts can still claim. Even if you have paid off your debts, you may still be able to get a refund if you struggled to repay the money at the time.
- If you are still paying off your payday loan debts, you can still complain. You can complain if you had trouble paying back. If your complaint is successful, it could reduce the amount you owe.
- You can always pretend that the business no longer exists. Big companies like Wonga and QuidQuick don’t work anymore, but that doesn’t mean you can’t get the money back. Customers can still file complaints against businesses that are no longer functioning, although they are less likely to receive a refund as they will have to go directly to the administration companies. However, if their complaint is successful and they still have debts, it could mean that they have to repay less, so it’s still worth complaining.
He said in a statement: “All outstanding loans remain subject to the terms agreed with the Company and borrowers must continue to make their payments in the usual manner in accordance with the terms and conditions of the Company.
“The Joint Administrators work closely with the Financial Conduct Authority (FCA), supporting the Company’s creditors and clients where possible.”
Financial experts have warned customers not to be tempted to stop making repayments as they may face additional fees and charges.
Caroline Siarkiewicz, Acting Managing Director of the Money and Pensions Service, said: “While you may be tempted to stop your repayments, it is crucial to stick to your regular schedule because if you have entered into a loan agreement you must fill it out.
“If you miss repayments, you could be hit with additional fees and charges, and that could hurt your credit rating as well. “
The business shutdown could leave thousands of complaints unresolved with the UK’s Financial Ombudsman Service, unable to confirm whether they can still be prosecuted.
How to claim compensation from payday lenders
IF you think a payday lender owes you compensation, here’s how to make a claim according to financial blogger DebtCamel:
You will need to prove that you could not afford the loan when you borrowed it. If having the loan meant you couldn’t pay your bills or other debts, then you were loaned irresponsibly.
You may also be entitled to compensation if you have had late repayments, or have taken out back-to-back loans as this shows that you really could not afford a new one.
Examine your emails, bank statements, and your credit reporter for evidence.
You will need to write an official complaint letter to each lender explaining how you were irresponsibly loaned out and include the evidence.
You will have to cite “unaffordable loans” and ask for reimbursement of the interest and fees you paid, as well as the 8% Ombudsman interest on top.
Make copies of all evidence before sending it in in case something happens to them.
Also request that the loan be removed from your credit report.
You can find a sample letter here.
Wait up to eight weeks to hear from them. If you are not satisfied with the response or they do not respond to you, contact the financial mediator.
The regulator said in a statement: “We will work with the directors of the company to understand what this means for consumers, but it is unlikely that we will be able to advance existing complaints about CashEuroNet or to investigate further. new complaints about it.
“Once we have clarification on this from the directors of the company, we will write to people who are currently having business against CashEuroNet with us to advise them on what to do.”
CashEuroNet – which is the UK parent company of QuickQuid – was the most criticized payday lender in 2018 with 10,409 new cases, of which 63% were confirmed in favor of the consumer.
In 2015, the company, which also owned the Pounds to Pocket brand, was forced to pay £ 1.7million in compensation for loans to people who could not afford to repay the money.
This was rebranded in February of this year to On Stride Financial, which provides unsecured personal loans up to £ 5,000.
As Enova chief executive David Fisher announced the shutdown of QuickQuid, he said: “We have been working with our UK regulator to agree on a lasting solution to the high complaints to the UK financial ombudsman, which would allow us to continue to provide access to credit to hardworking Britons. “
Payday lenders have come under pressure in the UK following the introduction of stricter affordability controls.
In 2014, the FCA introduced rules prohibiting payday lenders from charging borrowers fees and interest in excess of the amount borrowed.
The financial regulator also announced a cap on option-to-buy rental products following The Sun’s Stop The Credit Rip Off campaign.
There has been a huge jump in Britons taking out payday and short-term loans in recent years.
In July, PiggyBank was also temporarily banned from granting loans over “concerns” that they could be irresponsible lending.
Meanwhile, payday lenders are targeting skint parents with loans for school uniforms – at interest rates of up to 1,333%.