Cash Genie is a payday lender who has admitted to engaging in unfair lending processes. 92,000 customers of the payday loan company have been affected by the company’s unfair interest rates and the unethical processes that it uses to loan people the money.
Some of the processes that Cash Genie have used include charging people a hidden £50 fee to refer people to their sister company, rolling over loans without the explicit permission of the borrowers and, perhaps most importantly of all, passing on bank details to other companies in the group. The company went into liquidation in 2016 and vowed to trace all of the borrowers who were still owed money by the group.
The company vowed to pay off £15m worth of debt as well as writing off any interest that people still owed. Some of the failings of the company are so huge that many people had their lives turned upside down. The sister company that people were referred to were a debt collection firm, and although Cash Genie incurred no additional expenses for referring them many people were still charged £50 – a lot of money if you’re on a tight budget. On top of this, they charged fees for sending out letters or tracking down customers who had moved or changed names. Although this is often standard practice, Cash Genie was charging excessive amounts and not just covering their own expenses.
Loans were also rolled over without the consent of borrowers, meaning that reassessments weren’t undertaken so the company had no way of knowing whether people’s situations or circumstances had changed. Normal loan companies should perform regular checks to make sure that people are still able to pay back their loans at the agreed rates. Because Cash Genie wasn't contacting their customers at appropriate times they couldn’t perform these checks and had no way of knowing if the borrowers were still able to make the repayments.
Not only did they not perform the necessary and correct checks and assessments, they also failed to send annual statements to customers who hadn’t paid back their loans within 12 months. This means that they essentially forfeited the right to apply further fees or interest to these accounts. The misuse of the customers’ bank details is perhaps the most unforgivable thing. Customers were advised to use other companies owned by the group as these loans were ‘pre-approved’. Their bank details were then used to take payments for existing Cash Genie loans without informing the customer.
Payday loans seem like a good idea and in theory, they should be. Borrow a small amount of money and repay it when you next get paid. Simple. However, with companies like Cash Genie charging extortionate interest fees and misusing customer details, they can end up ruining lives.
Many people ended up in far more debt than they initially were simply by using a payday lender. People found that they were having to get out more loans in order to pay back the interest fees that were charged. This led to a seemingly unbreakable cycle where they were stuck borrowing and repaying every month. This happened due to the unfair checks and assessments that were conducted. Regulated lenders ask for a lot of information before approving a loan simply because they have to check whether the person borrowing can pay it back. They then offer appropriate interest fees and repayment schedules in order to help the borrower out as much as possible. Unfortunately, Cash Genie was only in it for themselves and wasn't concerned about the people who were struggling with money.