October 25, 2019 9:48:39 AM
QuickQuid customers with unresolved complaints or outstanding loans will be wondering what happens now that the payday lender plans to close.
In recent months, the Financial Ombudsman Service (FOS) has been dealing with thousands of complaints related to CashEuroNet UK, which trades as QuickQuid.
This year so far, the ombudsman service has been coming down on the side of the consumer more often than not – with 59% of complaints made to it about CashEuroNet UK between January and June being upheld.
With uncertainty still surrounding exactly what the knock-on effects will be following news that QuickQuid is to shut its doors, the ombudsman put a brief statement on its website on Friday which read: “We are aware of reports that CashEuroNet, which includes the QuickQuid trading name, will be exiting the UK market.
“We are working to understand what this means for complaints about the company and will be providing more information to consumers as soon as possible.”
John Cullen, business recovery partner at accountancy firm, Menzies LLP, said: “For former customers, who feel they have been taken advantage of and are in financial hardship, the future is still uncertain, as the value of any compensation payouts will now depend on the process of closing the company.
“What is clear is that in the face of growing regulatory pressures, the curtain appears to be drawing on the payday lender market.”
The regulatory landscape is tougher for payday lenders than it once was, following a clampdown by the Financial Conduct Authority (FCA) to make sure people could only afford to take out loans that they could afford to pay back.
Wonga, which had once been Britain’s biggest payday lender, collapsed last year.
Customers who still owe QuickQuid money on loans have been urged by money experts to keep up their repayments – or potentially face damage to their credit ratings or extra charges.
Some Twitter users welcomed the news, with one remarking: “Good riddance is all I can say!!”
But others were concerned that it could lead to more people struggling to find a loan.
One wrote: “Where will we get our payday loans from now?”
Caroline Siarkiewicz, acting chief executive at the Money and Pensions Service, said that 11.5 million adults have less than £100 in savings and investments – “so lots of people face cash-flow problems which can make quick, short-term credit feel like the only option”.
But, she continued: “If you know you need a specific amount of money for a short while, there may be more affordable alternatives out there so it’s a good idea to shop around before you borrow.”
With the number of payday lenders in the market having shrunk in recent years, some alternative options for borrowers could include community development finance Institutions (CDFIs).
These are small independent organisations that offer loans to people who have been turned down by their bank or credit card company.
Or, it may be that getting free debt help from a body such as StepChange or Citizens Advice could avoid the need for a loan altogether.
More help on finding alternatives to a payday loan is available at the Money Advice Service website: www.moneyadviceservice.org.uk/en/articles/alternatives-to-payday-loans.