Payday lender set to pay out £1.7m to customers

Payday lender CashEuroNet are set to pay out £1.7m to customers after the Financial Conduct Authority found it had allowed people to borrow more than they could afford to repay.

The company, which trades in the UK under the names Quick Quid and Pounds to Pocket, will have to provide redress to 3,940 affected customers who were lent sums in excess of what they could afford.

Those affected include:

• 2523 customers who will have their current loan balance written off

• 961 customers who will be paid a cash refund for the interest paid on the unaffordable element of their loan

• 456 customers who will receive both a cash refund and have their current loan balance written off

The findings come after concerns were raised by the FCA about CashEuroNet's lending criteria, leading the company to make changes to its loan criteria and reassess all loans granted since 1 April 2014 which were in arrears for 30 days or more.

Jonathan Davidson, director of supervision, retail and authorisations at the FCA, said he was pleased the issue was being addressed but it was important that lending companies carried out proper affordability checks before granting customers loans in future.

CashEuroNet will contact those affected customers directly and customers do not need to take any action.