Cash crash

FAILED LENDER BREAKS £2OM COMPO PROM­ISE

The People - - NEWS FEATURES - By Do­minik Le­man­ski Stephen Hay­ward

A FOR­MER money lender can­not af­ford to pay £20mil­lion vowed to vic­tims of its un­fair prac­tices.

Crashed on­line firm Cash Ge­nie’s ad­min­is­tra­tors told bor­row­ers the com­pany is un­likely to hon­our the prom­ise.

They blamed pub­lic­ity over the fall of pay­day ri­val Wonga for “mak­ing cred­i­tors aware they may have a po­ten­tial claim”.

Debt ex­pert Sara Wil­liams, who blogs as the Debt Camel, said: “Cash Ge­nie was a reg­u­lated lender but the reg­u­la­tor failed to pre­vent its cus­tomers be­ing very badly treated. Now they are los­ing their com­pen­sa­tion.”

Cash Ge­nie, which of­fered short-term loans at an an­nual in­ter­est rate of 2,986 per cent, stopped lend­ing in Septem­ber 2014. In 2015 reg­u­la­tors or­dered it to pay out or write off more than £20mil­lion for 92,000 cus­tomers over the way the firm han­dled “rollover” loans and debt col­lec­tion. Un­fair prac­tices un­cov­ered by the Fi­nan­cial Con­duct Author­ity in­cluded charg­ing a £50 fee for re­fer­ring cus­tomers to its debt col­lec­tion arm and us­ing bank de­tails ob­tained from other com­pa­nies to re­cover debts.

Cash Ge­nie agreed to give £10mil­lion in com­pen­sa­tion to cus­tomers and writ­ing off £10.3mil­lion of fees and in­ter­est. But ad­min­is­tra­tors now say there is no longer enough money. Ms Wil­liams said: “This will leave many peo­ple out of pocket. I think com­pen­sa­tion should be cov­ered by the Fi­nan­cial Ser­vices Com­pen­sa­tion Scheme.the reg­u­la­tors need to look at chang­ing rules to pro­tect cus­tomers.”

UN­FAIR: Cash Ge­nie’s logo

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