Biggest QuickQuid payday lender on the brink of collapse | Economic news

Britain’s largest remaining payday lender is on the verge of collapse, accelerating the demise of consumer credit providers following a regulatory crackdown.

Sky News has learned that CashEuroNet UK, which trades under the QuickQuid brand, could be placed under administration within days.

If upheld, the move would come just over a year after Wonga – at the time the UK’s largest short-term lender – was plunged into insolvency amid a deluge of claims compensation for customers.

Grant Thornton, who manages Wonga’s administration, has reportedly been appointed to take on the same role at CashEuroNet UK if the parent company’s board decides to pursue insolvency proceedings.

An insider in the accounting profession said Grant Thornton was selected following a competitive bidding process.

CashEuroNet UK has been one of the UK’s most criticized consumer credit providers for some time, attracting over 3,000 complaints to the Financial Ombudsman Service (FOS) in the first half of the year.

In 2015, the company, which also owned the Pounds to Pocket brand, agreed to provide £ 1.7million in repairs to customers after failing to comply with affordability tests.

If it goes under administration, a number of jobs will be at risk, although the size of the affected workforce, its current customer base and its portfolio of outstanding loans were unclear on Thursday.

CashEuroNet UK is owned by New York Stock Exchange listed Enova International, which is expected to report its third quarter financial results after market close on Thursday.

Enova claims to have provided more than 5 million customers worldwide with over $ 20 billion in loans and financing, while the QuickQuid website refers to “over 1.4 million customers and more.”

Its other UK brand, On Stride Financial, offers unsecured personal loans of up to £ 5,000 as an alternative to payday loans.

The payday lending industry has come under great pressure in the UK following the introduction of tighter accessibility controls and caps on the cost of short-term credit for consumers.

Wonga’s collapse came just weeks after she secured an emergency cash injection from shareholders in a desperate attempt to stay afloat.

Another major player called Instant Cash Loans (ICL), which owns The Money Shop, Payday Express and Payday UK, recently sought approval of a compromise deal under which up to 2 million customers could receive payments. if they have a valid complaint about a loan.

Abusive sales complaints are due to be submitted by ICL customers by next spring.

ICL is owned by US hedge fund HPS Investment Partners, which made the decision over the summer to shut down a company that is also among the UK’s largest payday lenders.

It was not clear whether CashEuroNet UK had held talks with the Financial Conduct Authority about a similar compromise program.

Enova previously suggested that the FOS is taking an overzealous approach to handling complaints in favor of customers.

The US-based company, which is profitable and also has operations in Brazil, has a market capitalization of around $ 700 million (£ 538 million).

Dozens of other suppliers have gone to the wall in the five years since the FCA assumed responsibility for regulating the industry.

Picture:
Wonga, once the biggest name in the payday lending industry, collapsed in August last year

Following Wonga’s demise, Nick Drew, Managing Director of CashEuroNet UK, insisted his business was “profitable and growing, and we remain excited about the opportunities, especially in light less competition in the market ”.

The disappearance of so many players in the sector has highlighted the difficulties faced by many consumers in accessing credit to meet short-term financial needs.

CashEuroNet declined to comment, while Enova could not be reached for comment.

The FCA and Grant Thornton also declined to comment.

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