The US owner of CashEuroNet UK, which operates the QuickQuid and On Stride brands, is considering his options after confirming his intention to withdraw from its UK operations.
Payday lenders have come under increasing criticism, accused by customers and regulators of unfair lending practices. Wonga collapsed in 2018 and The Money Shop in June due to similar issues.
QuickQuid’s announcement was sparked by the failure of its parent company Enova to strike a deal with UK regulators.
Enova CEO David Fisher criticized the ombudsman for ruling in favor of customers every time complaints were lodged. He said the regulator was still “moving the goalposts. . . establishing a constantly evolving de facto policy which in many cases was inconsistent with FCA guidelines. “
But Enova could not come “to agree on a lasting solution to the high complaints”. The company said it anticipates a $ 74million fine upon its exit from the UK
Almost 9,000 complaints were lodged with the Financial Ombudsman Service about CashEuroNet from January to June.
The battle is over payday loan – in particular, how strict US federal rule will be in governing the industry – is heating up as an important deadline looms. Letters supporting the payday loan industry are said to have flocked to authorities ahead of the May 15 deadline for public comment on a proposed policy change.
Google banned apps charging interest rates of 36% or more, now putting the tech giant at the heart of the global fight against payday loans. Before the app ban, Alphabet-owned Google had started banning payday loan ads from appearing in its search engine.
California and Ohio are among the states that have started implementing measures to end high-interest loans. The Obama administration had launched policies to curb predatory lenders. However, the Trump administration has attempted to overturn these laws.
Earlier in October, California Governor Gavin Newsom signed a law imposing a 36% interest rate cap on consumer loans of $ 2,500 to $ 10,000.