The UK’s biggest payday lender, QuickQuid, is shutting down its operation in the UK.
QuickQuid is operated by CashEuroNet UK, which also operates the
On Stride brands.
The business has failed a year after its rival Wonga collapsed following a surge in customer compensation claims.
QuickQuid has received 3000 complaints in 6 months.
QuickQuid and other payday lender companies have faced a squeeze since
coming under tougher rules to protect people from being trapped by debt.
QuickQuid has said that the rush of complaints and uncertainty around regulations has damaged the business. QuickQuid’s owners, Enova, who is based in Chicago have decided to quit the UK after failing to reach agreement with the UK’s financial ombudsman. The failure to agree is over how many customers it should compensate over past loans.
CashEuroNet UK accounts for up to 25% of the UK payday loans
While CashEuroNet UK’s total customer numbers are not disclosed, the QuickQuid website claims to have served “1.4 million customers and counting”.
QuickQuid’s Chief executive David Fisher said:
“We worked with our UK regulator to agree upon a sustainable
solution to the elevated complaints to the UK Financial Ombudsman, which would
enable us to continue providing access to credit for hardworking
The Financial Conduct Authority (FCA) imposed affordability
checks and capped payday loan charges in 2014 to stop lenders charging more in
fees and interest than the amount borrowed.
The Financial Ombudsman Service (FOS) received more than 3,000 complaints relating to CashEuroNet UK between January and June 2019.
Where does that leave existing customers?
Consumer finance experts have said if QuickQuid customers do not
keep up payments they potentially face having to pay extra charges or suffer
black marks on their credit records.
If you are a customer who has already made a compensation claim
against QuickQuid, you could be disappointed. The FOS has said it may not be
able to process any more claims.
The Financial Ombudsman Service said:
“It is unlikely we will be able to progress any existing complaints about CashEuroNet (which includes QuickQuid) any further or look at any new complaints about it.”
The Money and Pensions Service, an official body sponsored by the Department for Work and Pensions, said many customers would be feeling uncertain about what this latest development meant for them.
But Caroline Siarkiewicz, the Money and Pensions service’s acting chief executive, said:
“While you may be tempted to stop your repayments, it is crucial to keep to your regular schedule, because if you have entered into a loan agreement, you must fulfil it. If you miss any repayments, you could be hit by fees and additional charges, and it could also harm your credit rating.”
The legal obligation for customers to repay their debts will almost certainly remain unchanged, and it may be that those who fail to make their repayments have their account passed to a debt recovery agency.
What happens next for customers?
One law firm who specialise in compensation cases said:
An estimated 10,000
complaints against QuickQuid were outstanding and that, potentially, around
6,000 of those would be likely to have had their complaints upheld. These
people may now end up out of pocket, it said.
These types of complaints often relate to affordability. For example, a borrower claims that the checks
a firm should have carried out were not done properly.
John Cullen, business recovery partner at accountancy firm
Menzies LLP, said:
“For former customers, who feel they have been taken advantage
of and are in financial hardship, the future is still uncertain, as the value
of any compensation payouts will now depend on the process of closing the
“What is clear is that in the face of growing regulatory pressures, the curtain appears to be drawing on the payday lender market.”
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