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To The Money Shop to Reimburse 6,000 Payday Loan Clients
Over 6,000 payday loan subscribers are to be reimbursed after failures by Britain's largest high-street provider, the Money Shop. According to the company's own credit standards, clients were permitted to take out more than the highest possible amount. Money Shop said that the bugs - attributed to a system failure - were now fixed.
"EZV requires all lenders to perform adequate controls to make sure that they do not take over more than they can allow them to repay," said Clive Adamson, EZV's Supervisor Overseer. Affected 6,247 clients are reimbursed an average of more than 100 per client to offset interest and cancellation fees.
Money shop said that the overloved amount was on aggregate only about 12 per unit, but still the fees would be reimbursed. "Errors occur, and when they do occur you can be sure that we will correct them as we have done in this case," said Sanjiv Corepal, Money Shop's executive manager. StepChange Debt Charity said it was further proof that payday creditors could not act in the interest of the borrower.
"In spite of reiterated reassurances from the payday loan sector that it borrows in a responsible manner and that bad practices are a thing of the past, we have seen further cases of individuals caught up in untenable and prohibitive credit cycle costs," said Peter Tutton, StepChange's political leader.
Money shop owners, Dollar, have also said they are willing to upgrade customer ratings to see if they can pay back the loan. She appoints an independant individual to review the company's credit policy. He or she will also discuss their credit experience with clients and submit a statement to the FCA.
Dollars, which also own Payday UK, Payday Express and Ladder Loans, has 24% of the payday markets. EZV is likely to announce an upper limit on borrowing costs for the payday industries by the end of this weeks.