Money Shop owner Dollar Financial to refund £15.4m to 150,000 customers in ongoing payday lending scandal
The Big Local group I support in Mablethorpe are having real difficulties finding a credit union prepared to engage with them. This article therefore caught my eye and made me wonder about the rural penetration of credit unions. I know they do this well in Southern Ireland but perhaps less well in the UK. This article tells us:
The payday lender scandal continues. The latest high-cost credit company to be fined is Dollar Financial, which has been forced to refund more than £15.4m to 147,000 customers.
After an investigation into the firm, the City Watchdog ruled that Between April 2014 and April 2015 – after tough new lending rules came in – Dollar customers “may have suffered detriment as a result of the firm’s affordability checks, debt collection practices and systems errors”.
In short many were lent more than they could afford to repay. The company – which owns the high street chain The Money Shop, plus online loan firms Payday UK, Payday Express and Ladder Loans – has now had to change its lending criteria to meet the Financial Conduct Authority’s rules for high cost short term lenders.
Carl Packman, author of a book on payday lending, said: “The news confirms what many critics have known about the payday loans business for some time: that in order for payday lending to grow in the way it did over the recession years it needed to rip off people struggling with their finances.”