QuickQuid collapses into administration – your rights and how to claim compensation as the payday loan company goes bust
BRITAIN'S biggest payday lender QuickQuid has collapsed into administration, plunging millions of customers into financial uncertainty.
Customers have been warned to keep up loan repayments or they could face damaging their credit score or be hit with additional charges.
QuidQuick's owner, US-based Enova, has confirmed that it will be leaving the UK market, after receiving more than 3,000 complaints in the first six months of the year.
The news comes just over a year after Wonga - at the time the UK's biggest short-term lender - went bust following a spike in customer compensation claims.
Grant Thornton, which is handling the administration of Wonga, has been appointed to undertake the same role at CashEuroNet, which operates the QuickQuid and On Stride brands.
The administrator confirmed that here would be no new lending by the firm and that customers should continue to make payments as usual.
Are you due a payday loan refund?
MILLIONS of payday loan customers may be due refunds.
Refund or compensation is often given where the loan was mis-sold or where affordability checks weren't stringent enough. Here's all you need to know:
- Customers who've paid off payday loans debts can still claim. Even if you've paid off your debts you may still be able to get a refund if you struggled to repay the money at the time.
- If you're still paying off payday loan debts you can still complain. You can complain if you've struggled to make repayments. If your complaint is successful it could lower the amount you owe.
- You can still claim is the firm no longer exists. Big firms such as Wonga and QuidQuick no longer operate but that doesn't mean you can't get some money back. Customers can still make complaints about firms which no longer operate, although it is less likely that they will receive a refund as they will have to apply directly to administration firms. Although, if their complaint is successful and they still owe debts this could mean they have to pay back less so it's still worth complaining.
It said in a statement: "All outstanding loans remain subject to the terms agreed with the Company and borrowers should continue to make payments in the usual way according to the Company’s terms and conditions.
"The Joint Administrators are working closely with the Financial Conduct Authority (FCA), supporting the Company’s creditors and customers where possible."
Money experts warned customers not to be tempted to stop making repayments as they could face extra fees and charges.
Caroline Siarkiewicz, acting chief executive at the Money and Pensions Service, said: "While you may be tempted to stop your repayments, it is crucial to keep to your regular schedule, because if you have entered into a loan agreement you must fulfil it.
"If you miss any repayments you could be hit by fees and additional charges, and it could also harm your credit rating."
The company's closure might leave thousands with unresolved complaints with the UK's Financial Ombudsman Service unable to confirm whether they could still be pursued.
How to claim compensation from payday lenders
IF you think you are owed compensation from a payday lender then here's how to claim according to money blogger DebtCamel:
You'll need to prove that you couldn't afford to take out the loan at the time that you borrowed it. If having the loan meant that you couldn't pay your bills or other debts then you were irresponsibly lent to.
You may also me entitled to compensation if you had any late repayments, or if you took out back to back loans because this shows that you really couldn't afford to take out a new one.
Look back through your emails, bank statements and credit reporter for evidence.
You'll need to write a formal complaint letter to each lender explaining how you were irresponsibly lent to and include the evidence.
You'll need to cite "unaffordable loans" and ask for a refund of the interest and charges you paid, as well as the 8 per cent Ombudsman interest on top.
Make copies of all of the evidence before sending in case anything happens to them.
Also ask for the loan to be removed from your credit record.
You can find a letter template here.
Wait up to eight weeks to hear back from them. If you're not happy with the answer, or they don't get back to you, contact the Financial Ombudsman.
The regulator said in a statement: "We will be working with the administrators of the company to understand what that means for consumers, but it is unlikely that we will be able to progress any existing complaints about CashEuroNet any further, or look at any new complaints about it.
"Once we have clarity on this from the administrators of the firm, we will be writing to people who currently have cases against CashEuroNet with us to advise them on what they should do."
CashEuroNet - which is QuickQuid's UK parent company - was the most complained about payday lender in 2018 with 10,409 new cases, of which 63 per cent were upheld in favour of the consumer.
In 2015, the company, which also owned the Pounds to Pocket brand, was forced to pay £1.7million in compensation for lending to people who couldn't afford to repay the money.
This was rebranded in February this year to On Stride Financial, which provides unsecured personal loans of up to £5,000.
As Enova chief executive David Fisher announced QuickQuid will close, he said: "We worked with our UK regulator to agree upon a sustainable solution to the elevated complaints to the UK Financial Ombudsman, which would enable us to continue providing access to credit for hardworking Britons."
Payday lenders have come under pressure in the UK following the introduction of stricter affordability checks.
In 2014, the FCA introduced rules which banned payday lenders charging borrowers more in fees and interest than the amount borrowed.
The financial regulator has also announced a cap on rent-to-own products following The Sun's Stop The Credit Rip Off Campaign.
Most read in money
There's been a huge jump in Brits taking out payday and short-term loans in recent years.
In July, PiggyBank was also temporarily banned from handing out loans over "concerns" it could be irresponsibly lending.
Meanwhile, payday lenders are targeting skint parents with loans for school uniforms — at interest rates of up to 1,333 per cent.