what the closure of the payday loan company will mean for customers – and if the complaints will be resolved

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The UK’s largest payday lender, QuickQuid, is due to close after thousands of complaints and regulatory uncertainty rocked the company.

The brand’s US owner, Enova, had been working for months to reach an agreement with authorities after more than 3,000 complaints were filed by customers about the company in just six months.

Most complained about the lender

QuickQuid is CashEuroNet UK’s best-known brand and claims to have provided loans to over 1.4 million people in the country.

Enova will take a one-time after-tax charge of around $ 74million (£ 58million) to support the termination of its UK loans.

Announcing that the company will be pulling out of the UK this quarter, Managing Director David Fisher said credit for hardworking Brits.

CashEuroNet UK has been one of the most criticized financial services providers in the UK for some time, having received over 3,000 complaints to the Financial Ombudsman Service in the first half of this year.

It was the most criticized payday lender in 2018, with more than 10,000 complaints – 63% of which were upheld in favor of the consumer.

In 2015, the company was forced to pay £ 1.7million in compensation after loaning money to people who could not afford to pay it back.

Stricter rules

The convenience industry has faced a squeeze since tougher rules were passed by the city’s regulator, the Financial Conduct Authority (FCA), to keep people from getting trapped in debt spirals, following an outcry from charities and consumer activists.

The new rules capped the amounts that payday lenders were allowed to charge, forcing them to meet more stringent FCA standards in order to continue operating.

The business shutdown comes just over a year after Wonga (the UK’s former largest short-term lender) was plunged into insolvency, following a flood of claims for ‘compensation of customers.

It is understood that the auditor Grant Thornton, who is responsible for the administration of Wonga, has been appointed to administer the business.

Industry insiders say the industry must constantly change to meet expectations.

Meanwhile, lenders are beset by customer complaints, often encouraged by claims handling companies.

These complaints were one of the main reasons rival Wonga was forced to shut down a year ago and complaints management companies fear that QuickQuid’s failure could be damaging to consumers who have already had to do so. facing a collapse of the sector.

US owner Enova has not clarified what will happen to his UK customers (Photo: Shutterstock)

What does this mean for customers?

It is not yet clear how many jobs will be at risk as a result of the shutdown, and Enova has not specified what will happen to its UK customers.

Tola Fisher, personal finance expert at Money.co.uk, told Metro borrowers will likely still have to repay their loans.

Those with complaints about the process could also face delays.

Fisher said, “If you are currently seeking compensation from QuickQuid for a mis-sold loan and it goes bankrupt, you will have to wait until the directors have liquidated the company.

“Unfortunately, you might find yourself at the end of a long line to collect your money. “

This article originally appeared on our partner site, the Yorkshire Evening Post.

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