Loan customers urged to keep up repayments as UK's biggest payday lender faces uncertain future
PUBLISHED: 10:36 25 October 2019 | UPDATED: 10:37 25 October 2019
People who've taken out payday loans with QuickQuid are advised to keep up their repayments despite uncertainty around the firm's future.
The advice comes as the US owner of the payday lender said it is pulling out of the country after failing to reach an agreement with the Financial Ombudsman over complaints from customers.
But today the boss of the Money and Pensions Service warned peoples not to be tempted to stop making repayments. Caroline Siarkiewicz, acting chief executive at the Money and Pensions Service, which is sponsored by the Department for Work and Pensions, said: "Many QuickQuid customers will be feeling uncertain about what this means for them. While you may be tempted to stop your repayments, it is crucial to keep to your regular schedule, because if you have entered into a loan agreement you must fulfil it."
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QuickQuid offers online easy borrowing but gives an example of borrowing £250 for 74 days with one repayment of £74 and one repayment of £324 equating to an interest rate of 292%.
QuickQuid owner Enova had been working to reach a deal with authorities after customers filed more than 3,000 complaints about the company in the first six months of the year.
"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 for hard-working Britons," said CEO David Fisher as he announced that the company would withdraw from the UK this quarter.
Enova will take a one-off after-tax charge of around $74 million (£58 million), which includes a cash charge of $43 million (£33 million) to support the end of its lending in the UK.
QuickQuid has faced a squeeze since facing tougher rules from the Financial Conduct Authority (FCA), to prevent people being trapped in debt spirals, following an outcry from charities and consumer campaigners.
The company claims to have lent to more than 1.4 million people in the country.