Following the collapse of Wonga last year, the UK’s largest remaining payday loan provider has announced it will close “due to regulatory uncertainty”. This will leave thousands of consumer complaints about its lending practices unresolved.
This is the latest in a string of payday loan companies to close after regulations were tightened. Quickquid has been the biggest payday lender for the last two years after the closure of Wonga in August 2018 and The Money Shop earlier this year.
Rules brought in five years ago limited the interest rates and fees payday lenders were allowed to charge. It also included newer, more thorough affordability checks. This led to a surge in the number of complaints from customers saying they had been mis-sold loans that they couldn’t afford.
Quickquid is a brand name of CashEuroNet UK, which also runs On Stride, previously known as Pounds to Pocket – a company that offers long-term, larger loans to consumers.
Its owner Enova said: “Over the past several months, 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. While we are disappointed that we could not ultimately find a path forward, the decision to exit the UK market is the right one for Enova and our shareholders.”
So what’s next for Quickquid’s customers?
Despite many consumers thinking QuickQuid’s closure will make their loan invalid, this it not the case. Those with current loans from the company will still be required to make repayments as usual.
Caroline Siarkiewicz, acting chief executive at the Money and Pensions Service said: “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. If you miss any repayments you could be hit by fees and additional charges, and it could also harm your credit rating”.