The UK’s biggest payday loan firm is set to close its doors after receiving a slew of complaints.
QuickQuid’s customers are being advised that they should carry on with their repayments despite uncertainty around the firm's future.
The firm’s US owner Enova had been working for months to reach a deal with authorities after customers filed more than 3,000 complaints about the company in just 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 hardworking Britons,’ chief executive David Fisher said as he announced the company would withdraw from the UK this quarter.
Enova will take a one-off after tax charge of around 74 million US dollars (£58 million), which includes a cash charge of 43 million US dollars (£33 million) to support the end of its lending in the UK.
QuickQuid is the best-known brand of CashEuroNet UK.
The payday sector has faced a squeeze since coming under tougher rules under City regulator the Financial Conduct Authority (FCA), to prevent people being trapped in debt spirals, following an outcry from charities and consumer campaigners.
A cap was placed on the amounts payday lenders were allowed to charge and they have had to meet the FCA's stricter standards in order to continue operating.
The Financial Ombudsman Service (FOS) received more than 3,000 complaints relating to CashEuroNet UK between January and June 2019.
Caroline Siarkiewicz, acting chief executive at the government's money and pensions service, 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.
‘If you miss any repayments you could be hit by fees and additional charges, and it could also harm your credit rating.’
It is unclear how many jobs at the payday lender might be put at risk if it goes under.
Enova did not clarify what will happen to its UK customers.
The company claims to have lent to more than 1.4 million people in the country.
Tola Fisher, a personal finance expert at Money.co.uk, said that borrowers will likely still have to pay back their loans.
Meanwhile, those with complaints against the process could face delays.
‘If you're currently claiming compensation from QuickQuid for a mis-sold loan and it goes bust, you will need to wait until the administrators have wound up the company.
‘Unfortunately you might find yourself at the back of a long queue to get hold of your money,’ she said.