What a meanie! £20m compensation promise broken by UK lender Cash Genie
Nothing’s magical in the UK as per usual as the failed lending firm Cash Genie has gone back on its compensation promise of £20 million.
The event stems back to 2015, when Ariste Holding Limited, trading as Cash Genie, agreed with the UK’s Financial Conduct Authority (FCA) that it would provide redress to customers who were affected by past unfair practices.
The firm was punished, among other things, for charged fees and interest which were “unfair”; and because loans were rolled over or refinanced without customers’ explicit request or consent and without undertaking appropriate checks or assessments of the customers’ situations.
According to Debt Camel and the Daily Mirror, on 2 November 2018, audit, tax and consulting services firm RSM wrote to creditors of Ariste, saying that it was no longer solvent.
As a result, customers expected a refund or compensation will no longer receive the full amount they are due. This news comes just in time for Christmas.
Debt Camel says in January 2016, Cash Genie stopped trading and entered into a “solvent liquidation”. There was expected to be enough money to pay all its creditors, including the customers due compensation.
However, the RSM letter reveals the bad news. As result there isn’t going to be enough money to pay all the claims in full and the liquidation has been converted into a creditors’ voluntary liquidation.
Debt Camel points out that people will not get the full amount of the refund agreed, but there is at the moment no indication of whether they will get 10%, 50% or 90% of this.
Of course, this lending failure comes at a time when another company recently went under.
Back in August, UK payday lender Wonga entered administration.
The firm was often criticised for its high interest charged. Figures vary over time – depending on who you read. Its annual percentage rate was at 4,214%, 1,509%, and other high numbers.
There was little sympathy from Twitter users about Wonga being no longer. Comments ranged from “So loan sharks #Wonga have gone under? Good.” to “Lol rot in hell”.