You may have seen in the news that modern payday loan providers Quick Quid have fallen into a spot of financial trouble. They have received thousands of complaints, so the question is, what can you do if you’re affected?
Who is Quick Quid?
Quick Quid make the second big payday loan company to be put into administration. Before their administration, Quick Quid was one of the biggest short-term lenders in the country. They made up around 25% of the market at their peak.
Since their launch in 2007, they gave out loans to over 1.4 million customers. Many of which were unaware of what their loan truly meant in terms of repayments. The worst it came to was when a customer was able to take a £250 loan out for three and a half months with an annual percentage rate of 1,300% according to the lender’s website. With many other lenders following similar patterns, it took the Financial Conduct Authority to make changes to legislation in 2014 and 2015. This meant that there was now a cap on how much these companies can lend to people. Customers had to pass affordability checks in order to avoid falling into a debt spiral.
What’s happening to them now?
After these legislations were put into place, payday loan companies have struggled to keep going. Constant changes and updates to this legislation means that the companies in this sector must keep changing and adapting. This is in order to meet these expectations and keep trading. These changes take a lot of money to keep up with. With fewer people coming to Quick Quid for these loans they are unable to keep up. They’ve found it financially unstable to carry on. This has led to Quick Quid terminating any further business in the UK and leading them to pay a one-off after-tax charge of £58 million.
Why are Quick Quid going into administration?
The reason behind pulling out of the UK for trading is because of two main factors. Similarly, to Wonga Loans, the implementation of stricter rules on lending money to the public meant that many policies for Quick Quid had to change to conform to these new rules. These new rules pose a challenge for the sector due to the expectations of these companies forever changing.
With these rules clearly defined it was revealed that many previous customers who are now indebted to Quick Quid were mis-sold these loans. This is due to checks not being made on their financial history, meaning they were being offered loans that they were never able to pay back. The complaints and disputes became too much for them to handle. In the first half of 2019, there had been over 3,000 complaints made to the Financial Ombudsman against Quick Quid. This then led to many being applicable for compensation.
What does this mean for you?
Sadly, there isn’t a lot of good news for people that have taken out a loan with them. For people that still owe the company money, it has been said by Tola Fisher, a personal finance expert at money.co.uk, that borrowers will likely have to pay back their loans. People that have made complaints about them could face delays in the process as they’re processing the company through administration. The collapse has also meant that compensation claims will receive considerably smaller amounts compared to before the crash. These claims are disputed by Quick Quid in order to retain as much money as possible.
With the company going into administration your time to complain to Quick Quid is running out. Similarly, if you feel you’ve been mis-sold a loan from the company then it isn’t too late to claim. You will, however, need to join the queue to be given your compensation. To do this you can complain to Quick Quid directly through the Quick Quid customer services page. Otherwise, make sure to give the Financial Ombudsman a call with details on your case.