QuickQuid: UK's largest payday lending firm to close
The UK's biggest remaining payday loan provider is to close, with thousands of complaints about its lending still unresolved.
QuickQuid's owner, US-based Enova, says it will leave the UK market "due to regulatory uncertainty". Compensation claims have been made from customers who said they were given loans they could not afford to repay. It is the latest firm offering short-term, high-interest loans to close after regulations were tightened. QuickQuid has been the biggest payday lender in the UK for the past few years. It was bigger than household name Wonga even before the latter folded in August last year. The Money Shop closed earlier this year. 'Sometimes you don't have any other choice' Kenneth Barker took out 11 consecutive loans in less than a year when he was a barman in Essex in 2012. "The initial one was for £100. I paid back £160, but then needed a £150 loan to tide me over for the next month. It gradually worsened," said the 28-year-old, who now lives in Leeds. "To be honest, I knew what I was getting myself into, but sometimes you don't have any other choice." He submitted a complaint nine months ago, claiming he was given unaffordable loans, and was offered £50 in compensation by the company. He said: "I then went to the financial ombudsman. That was accepted and I was offered £2,000. I was told I'd get it within 28 days. I'm hoping I will still get that money! "I have no idea how this is going to proceed or whether I will receive this money." Despite waiting for his compensation, he said he was pleased that a business such as QuickQuid would be closing. Tighter rules QuickQuid is one of the brand names of CashEuroNet UK, which also runs On Stride - a provider of longer-term, larger loans and previously known as Pounds to Pocket. "Over the past several months, 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," said Enova boss David Fisher. "While we are disappointed that we could not ultimately find a path forward, the decision to exit the UK market is the right one for Enova and our shareholders." New rules brought in five years ago limited the interest rates and fees payday lenders can charge and introduced enhanced affordability checks. Since then there has been a wave of complaints from customers who say they were mis-sold loans they could not afford. QuickQuid has been facing as many as 10,000 or more outstanding complaints from borrowers. Such legacy loan complaints, many of which came via claims management companies, were the key reason for the demise of Wonga last year. Do I stop making repayments? The closure of QuickQuid might lead some to think their loan is invalid - but it is not. "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," said Caroline Siarkiewicz, acting chief executive at the Money and Pensions Service. "If you miss any repayments you could be hit by fees and additional charges, and it could also harm your credit rating." Those who are owed money in compensation must wait to see what the next move is for the business. The Money Advice Service website has a guide on alternatives to payday loans. Protection 'inadequate' As well as historic complaints, QuickQuid was also the subject of compensation claims for more recent loans. The UK's Financial Ombudsman Service said that it had received 3,165 cases against CashEuroNet in the first half of the year. It was the second most-complained about company in the banking and credit sector during that six months. The ombudsman upheld 59% of cases against the company during the same period, but a backlog of cases is thought to have built up. Anyone with eligible complaints who is entitled to compensation will now see the level of any payouts depend on the process of closing the company. Debt adviser Sara Williams, who writes the Debt Camel blog, said: "I feel incredibly sorry for those people with complaints that they may have had in with the ombudsman for years. "The current system does not give adequate protection for these borrowers."