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QuickQuid website
The UK’s biggest remaining payday loan provider will 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.
If those complaints are upheld, those affected may only receive a fraction of their entitled compensation.
QuickQuid has been the biggest payday lender in the UK for the last few years. It was bigger than household name Wonga even before the latter folded in August last year.
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.”
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The company has been facing as many as 10,000 or more outstanding complaints from borrowers who believed their past loans were unaffordable.
Such legacy loan complaints, many of which came via claims management companies, were the key reason for the demise of Wonga last year. They have also put the UK’s other major payday lender – The Money Shop – under financial pressure.
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 its 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 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.”