FAILED LENDER BREAKS £2OM COMPO PROMISE
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