Cash Genie to refund £20m: does it affect you?

[UPDATE: In January 2016, Cash Genie went into liquidation. According to the Financial Conduct Authority (FCA), the liquidation won’t affect the payment of refunds mentioned in this article.]

Payday loans company Ariste Holding Limited, which trades as Cash Genie, has agreed to pay out over £20 million to more than 92,000 of its customers.

The announcement comes a year after Cash Genie voluntarily told the Financial Conduct Authority (FCA), the body which regulates them, that they had treated customers unfairly.

Linda Woodall from 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.

“Although standards in the consumer credit sector are improving, it is disappointing that examples of poor practice in the payday market keep surfacing.”

Francis McGee, Director of External Affairs at StepChange Debt Charity, said: “It has been well established that unfair practices were widespread in the payday loan industry. Today’s news that tens of thousands who were on the receiving end of unscrupulous behaviour will be compensated is extremely welcome.”

So what actually happened?…

What happened with Cash Genie?

An independent review of Cash Genie’s past practices showed failings dating back to when the company first launched back in September 2009. The review uncovered a number of failings, including charging unfair fees and interest that weren’t part of their contract with their customers.

Cash Genie also rolled over or refinanced loans without their customers’ consent, and without appropriately assessing their customers’ situations.

The company also failed to send annual statements to their customers who hadn’t repaid their loans after 12 months, which meant customers had interest and fees added to their accounts when they should’ve been stopped.

Cash Genie also traded under the brand names and, and used the bank information customers gave on these websites to take payments for existing Cash Genie loans without their customers’ consent.

What’s Cash Genie going to do about it?

To try to put things right with their customers, Cash Genie has agreed to pay out £10m to their customers to make up for past wrongs, and have already voluntarily written off £10.3m in fees and interest.

Cash Genie has agreed with the FCA that they’ll write off and refund fees and charges which shouldn’t have been added to their customers’ accounts in the first place. They’ll also write off or refund interest that was added to loans which were rolled over inappropriately.

Payments which were taken without permission will be refunded, and any outstanding balances on accounts which had money taken in this way will be written off.

The company will also write off or refund any interest and fees which were wrongly added to customers’ accounts after the point they should’ve been sent an annual statement.

I’m a Cash Genie customer – what should I do?

If you’re a Cash Genie customer, you don’t need to do anything for now.

Cash Genie aims to contact everyone who has been affected by 18th September 2015. However you should make sure that Cash Genie has up-to-date contact details for you so they can get in touch to let you know if you’re due a refund.

If you believe you’ve been affected by any of Cash Genie’s failings and haven’t heard from them by 18th September then you should call them on 03333 660 023 to let them know.

You can find out more about what Cash Genie are doing to make things right with their customers on this dedicated page on their website or on the FCA website.

What impact could this have on my credit rating?

If you’ve been affected by these failings, particularly if you’ve had interest and charges added to your account unfairly, this might’ve impacted your credit rating. Cash Genie will get in touch with the credit reference agencies so they can amend your balance and remove any incorrect information relating to your account.

I’m a StepChange Debt Charity client and have been given a refund…what do I need to do?

Depending on what solution you’re on you may need to get in touch with us, once Cash Genie have been in touch with you. You don’t need to phone us until then.

If you’re on a debt management plan (DMP) or token payment plan (TPP)…

If you’re refunded a small amount of money, you won’t be expected to pay this money into your plan. If you get a larger refund you can get in touch with us for advice on what to do with it.

If you’re on a debt relief order (DRO)…

If you’re on a DRO and receive a refund, you’ve got to let your official receiver (OR) know. Your DRO usually won’t be revoked as long as the refund you receive is under £700 and counts for less than 50% of your total debt.

 If you’re on an individual voluntary arrangement (IVA) or Trust Deed…

If you’re on an IVA or Trust Deed, you should let your supervisor or trustee know that you’ve been given a refund. You’ll be able to keep it if it’s a small amount of money, but larger amounts may have to be paid to your trustee or supervisor.

If you’re bankrupt or have gone through sequestration…

If you’re bankrupt and receive a refund, you’ll need to make your official receiver (OR) or Accountant in Bankruptcy (AiB) aware. You’ll have to pay them any refund you are given, but you may be able to keep hold of the £50 compensation for distress.

Payday loans are designed to be a quick short-term fix, but they can soon spiral out of control if you don’t have enough money to pay them back.

For more information about payday loans and what alternatives are out there, take a look at our comprehensive payday loans guide.

Posted by in Living with debt