The Financial Conduct Authority has ordered payday lender CFO Lending to pay back £34m in redress to 91,000 customers because of “unfair practices”.
The watchdog uncovered a number of failings at the firm including the misusing of customers’ bank details to take payments without permission, and inaccurate loan balances resulting in some customers repaying more than they owed.
Gillian Guy, chief executive of Citizens Advice said:
“Irresponsible payday lending wreaks havoc on people’s finances.
“We welcome the FCA’s action to crackdown on CFO Lending’s unacceptable failings which have hit thousands of customers.
“Since taking over regulation, the FCA has cleaned up the payday loan market significantly with measures such as a cap on interest rates and fees.
“However, our recent evidence shows a quarter of borrowers say they were not, or could not remember being asked basic questions about their ability to pay back their payday loan.
“We want the FCA to tighten up its responsible lending guidance even further - forcing every single payday lender to carry out rigorous financial checks on potential borrowers.”
View report: https://www.fca.org.uk/news/press-releases/payday-firm-cfo-lending-pay-34-million-redress