Payday lender forced to repay £20m to ripped-off customers: Cash Genie closes down after being caught charging unnecessary fees

The high-cost credit company preyed on vulnerable people struggling because of the recession

Payday lender Cash Genie has been forced to pay £20m redress to ripped-off borrowers. The high-cost credit company – owned by Ariste Holding Limited – has agreed with the Financial Conduct Authority to hand over the cash to more than 92,000 customers for unfair practices.

The firm used a number of ways to rip-off desperate borrowers who turned to the firm for short-term loans. Shockingly, right from the day it was launched in September 2009 to profit from the number of people pushed into poverty by the credit crunch and recession, Cash Genie charged fees which it was not entitled to under its customer contracts.

For instance it charged people who were unable to repay their loans £50 to transfer them to its own debt collection firm, Twyford Developments trading as Carter Forbes, even though it incurred no fees of its own. That was blatantly ripping-off struggling people.

Loans were rolled over or refinanced – adding on extra interest and costs -without customers’ explicit request or consent and the company failed to do the appropriate checks or assessments of customers’ situations that you’d expect of a legitimate lender.

The company also traded under the online brands txtmecash and paydayiseveryday. Struggling Cash Genie borrowers were encouraged to turn to the websites on the promise they would be given a fresh loan to help their situation, but the sites were used to collect banking information from customers so the lender could take payment for existing loans without their permission.

Linda Woodall, acting director of supervision - retail and authorisations at the FCA said: “Although standards in the consumer credit sector are improving, it is disappointing that examples of poor practice in the payday market keep surfacing. We expect all firms to notify us of any unacceptable past or current practices and provide appropriate redress to anyone affected.”

The redress package agreed with the FCA will consist of a combination of cash refunds and balance write downs. Cash Genie has agreed to: write off or refund fees and charges which should not have been added to customer accounts; write off or refund rollover interest where the firm rolled over customers’ loans inappropriately; refund payments taken without authorisation.

In addition, the firm has agreed to write off all outstanding balances on accounts affected by this practice; and write off or refund interest and fees added to customers’ accounts after the point at which the firm should have provided customers with an annual statement.

Customers do not need to take any action, the City Watchdog said. Cash Genie aims to contact all affected customers by 18 September 2015. There is more information for anyone who thinks they may have been affected on the FCA and Cash Genie websites.