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A payday lending business has been forced to repay £35m to its borrowers for a catalogue of wrongdoings.
The company took money from its customers' bank accounts without permission, charged them more than they owed, and sent them threatening letters. CFO Lending will have to pay an average of £351 each to 97,000 customers. The Financial Conduct Authority (FCA) described the firm's "serious failings" as "unfair behaviour". Jonathan Davidson of the FCA said CFO's borrowers, who were mainly people in need of short-term loans, did not need to do anything now as the firm had agreed to contact all its customers by March next year. "We discovered that CFO Lending was treating its customers unfairly and we made sure that they immediately stopped their unfair practices," said Mr Davidson. "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."
Shrinking industry
CFO Lending was banned by the FCA earlier this year from making any new loans and now can only collect outstanding debts. The repayments will consist of £32m of debts being written off, and cash refunds of £3m. The firm, which started in business in 2009, traded under a number of brand names such as Payday First, Flexible First, Money Resolve, Paycfo, Payday Advance and Payday Credit. It is one of numerous smaller payday lending firms that have effectively been driven out of business by new rules, which have restricted the amount of interest they can charge, and by a regulatory crackdown on companies' behaviour towards borrowers.....Read more here
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Away from the glamour, complaints against CFO Lending – which Smith launched in 2008 – were beginning to rack up. And after facing an astonishing 246 investigations by the Financial Ombudsman, the loan shark was forced to pay back more than £34million to nearly 100,000 victims of its unfair practices. The lender took money from customers' accounts without permission, charged them more than they owed and sent threatening letters and text messages, the Financial Conduct Authority found. The company has been ordered to write off debts of nearly £32million and make £2.9million of cash payments to customers. The firm has also been banned from offering loans. C FO Lending, which was based in an office in Leytonstone, East London, was the parent company of six other payday lenders – Payday First, Flexible First, Money Resolve, Paycfo, Payday Advance and Payday Credit......Source: Read more HERE