Cash Genie alerted the regulator to its damaging practices in June 2014 and following a review of its business was found to have been failing its customers since the firm began trading in September 2009.
Examples of poor practice included charging customers £50 when it transferred them to its own debt collection service, Twyford Developments, even though it cost Cash Genie nothing to do this. The firm was also found to be rolling over loans without the explicit consent of its customers.
Ariste Holding Limited, owners of Cash Genie, also used the brands www.txtmecash.co.uk and paydayiseveryday.co.uk. It used banking details supplied by customers taking loans using these brands to service Cash Genie payments without the customer’s permission.
Linda Woodall (pictured), acting director of supervision – retail and authorisations at the FCA, said: “We have been encouraged that Cash Genie has been working with us proactively and openly to put things right for its customers after these issues were reported.” But Woodall added she was disappointed that examples of poor practice in the sector kept surfacing.
The compensation package includes redress of £10m and £10.3 written off in fees and interest.
Customers do not need to take any action. Cash Genie aims to contact all affected customers by 18 September 2015.