The Financial Conduct Authority (FCA) uncovered the dealings after it carried out a review into the lending decisions of Dollar Financial UK, trading as The Money Shop, Payday UK, Payday Express and Ladder Loans.
Since the review the firm has agreed to give 65,000 customers a cash refund and 67,000 a reduction to the loan balance. Some 15,000 customers will receive both forms of redress.
Jonathan Davidson, director of supervision – retail and authorisations at the FCA , said: “The FCA expects all credit providers to carry out proper checks to ensure that borrowers don’t take on more than they can afford to pay back. We are encouraged that Dollar is committed to putting things right for its customers.”
The redress relates to loans taken out between 1 April 2014 and 30 April 2015 for those with affordability issues and 1 January 2013 and 30 April 2015 for collection issues.
Dollar will start contacting customers immediately and plans to complete the scheme of redress by early 2016.
In the summer, another payday lending firm Cash Genie agreed to pay £20m in redress to 92,000 customers following an FCA investigation.
The FCA said it was ‘disappointing’ that poor practice continued to be a problem for the sector.
