The payday lending market in the United Kingdom has seen its fair share of controversies in recent times.
The latest to rock the market comes from QuickQuid who is set to close operations after many of its customers claimed that they were given loans they were not eligible for and are now forced to pay an interest rate which they cannot afford.
QuickQuid faced more than 3,000 complaints during the first six months of this year from customers who claimed they were sold on loans that they could not afford to repay.
US-based firm Enova who owns QuickQuid has been trying to work out a way to resolve this issue for months. This involved talks with British authorities, who have been placing regulatory pressure on the company to resolve these issues.
However, the firm’s CEO David Fisher confirmed that the talks between the company and the government have failed. As a result, QuickQuid will now leave the UK market and it will start winding up its operations. As of now, the company has stopped all lending operations. The sudden departure of QuickQuid from the UK market will create problems for is investors as well as those who need to be paid.
Customers who owe the company money will still have to clear their dues even though the company will no longer operate in the UK. The Money and Pensions Service in the UK has confirmed that any loan agreement with QuickQuid must be kept, with all payments kept to a regular schedule. Any missed repayments could result in additional fees and charges.
QuickQuid Must Pay Out Compensation
The Financial Conduct Authority (FCA) introduced rules back in 2014 to restrain the payday lending industry in going overboard with their interest charges. The rules state if an individual has been sold a loan by a lending company like QuickQuid and they were not eligible for the loan, the lending company will have to compensate them.
Additional reasons for compensation might be getting back-to-back loans or needing to roll out a loan repeatedly. This is because it might mean the loan was not affordable in the first place. If an individual who has taken out a loan, suddenly struggles to start paying their bills because of their loan, it could also mean that they were not eligible for the loan.
If a person is qualified for compensation, they need to write a formal complaint letter and present evidence that the loan was not affordable. This means sending copies of emails, bank statements and credit reports for proof. The letter should then ask for a refund of the interest and charges paid.
QuickQuid is expected to get thousands of such letters in the coming days and regulations require QuickQuid to pay off customers in eight weeks. However, due to the number of complaints, customers should expect some delays.
