Payday firm CFO Lending forced to pay £34 million redress
Payday firm, CFO Lending, has entered into an agreement with City watchdog the Financial Conduct Authority (FCA) to provide over £34 million of redress to more than 97,000 customers for unfair practices.
The redress consists of £31.9 million written-off customers’ outstanding balances and £2.9 million in cash payments to customers.
CFO Lending, which also traded as Payday First, Flexible First, Money Resolve, Paycfo, Payday Advance and Payday Credit, was accused by the FCA of a litany of failings dating back to its launch in April 2009, including:
Most of the firm’s customers had high-cost short-term credit loans (payday loans) but some customers had guarantor loans and some had both.
In August 2014, following an investigation by the FCA, the firm agreed to stop contacting customers with outstanding debts while it carried out an independent review of its past business. It also agreed to carry out a redress scheme.
In February 2016 the FCA, satisfied with the results of the independent review, authorised the firm with limited permission to collect its existing debts but not to make any new loans.
Jonathan Davidson, director of Supervision – Retail and Authorisations at the Financial Conduct Authority, said: “We discovered that CFO lending was treating its customers unfairly and we made sure that they immediately stopped their unfair practices. Since then we have worked closely with CFO Lending, and are now satisfied with their progress and the way that they have addressed their previous mistakes.
“Part of addressing these mistakes is making sure they put things right for their customers with a redress programme. CFO Lending customers do not need to take any action as the firm will contact all affected customers by March 2017.”