Cash Genie to pay more than £20m in compensation

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The trading name of Ariste Holding Limited, Cash Genie agreed the compensation deal with the Financial Conduct Authority (FCA), having admitted to using unfair practises.

One of these was charging customers £50 to transfer them to a debt collection firm run by a sister company, despite the fact that the lender incurred no extra costs for doing so.

People who have been affected by Cash Genie's antics should hear from them by September 18th.

Issues since 2009

Cash Genie voluntarily notified the FCA last June that they had been engaging in unfair practises, and in July they agreed to review their past business and set up a compensation system.

In September 2014 they stopped issuing new loans, and before this week's agreement they'd already written off £10.3 million in fees and interest incurred because of their lending practises.

The problems date right back to when they first started trading in 2009.

As well as charging customers to be transferred across to the Carter Forbes debt collection agency, owned by Twyford Developments Ltd, there were other failings:

Customers found their loans were refinanced or rolled into another term without request or consent, and without Cash Genie assessing whether it was an appropriate move for the customers involved.

Ariste Holdings have two other payday lending brands, txtmecash.co.uk and paydayiseveryday.co.uk, and falsely told existing borrowers that loans with these other brands were pre-approved.

Once customers had provided their bank details to these other companies, Ariste Holdings used them to collect payments on Cash Genie debts.

They also stopped sending annual statements to people who hadn't repaid their loans after 12 months. The FCA say this means those customers shouldn't have been subject to any further interest or fees - but many were.

Refunds and write-offs

The compensation will be fairly straightforward, with affected customers getting either a refund or a write-off of the fees and charges they've incurred as a result of these failings.

So anyone whose loans were rolled over or refinanced improperly will get back the interest incurred as a result, as will those who should have been receiving annual statements but didn't.

Those who applied for another loan with one of the company's other brands, and who then had payments taken without permission, will not only be refunded but they'll also have any outstanding balances written off.

Cash Genie say people whose accounts with them are now closed will also be given compensation in the form of a cash payment covering the total redress amount.

As mentioned above, Cash Genie say they intend to contact everyone affected by September 18th, but say anyone whose details have changed should get in touch with them.

The same goes for people who believe they're due compensation but haven't heard anything by mid September.

There are contact details for both groups of people on Cash Genie's website here.

Putting things right?

It's likely this won't be the last case in which a payday lender has to compensate customers.

Since the FCA took over regulation, there's been a crackdown on rollovers, affordability checks, and perhaps most notably the cap on fees and interest lenders can charge.

Even the biggest providers like Wonga are looking battered and bruised.

Despite a certain amount of fear mongering about the negative effects of tighter regulation on lenders and borrowers alike, Citizens Advice say there's been a dramatic drop in the number of issues regarding payday loans.

But that's not enough for the FCA. They seem determined to clean up the industry not just for existing users, but for those who've been caught out by poor practice in the past.

Speaking for the regulator, Linda Woodall says they "expect all firms to notify us of any unacceptable past or current practises and provide appropriate redress to anyone affected."