The Competition and Markets Authority (CMA) has announced that payday lender, Shelby Finance, has written off loans and apologised to customers after not providing them with important information.
The regulator found that Shelby Finance did not provide summary of borrowing statements to more than 15,000 customers between August 2018 and July 2019 – despite being required to do so under the CMA’s Payday Lending Order.
The CMA indicated that these statements help customers make timely and informed decisions by telling them how much interest or fees they are expected to pay on their loans, and when their next payment is due. The information can also help customers shop around for a loan that best suits their needs.
With research indicating that payday loans are often used by more vulnerable consumers, the CMA said it is particularly concerned about the impact this breach may have had on them.
After being contacted by the CMA, Shelby Finance has since written off loans of approximately £500,000 for some of the customers affected. The lender has also apologised, sent late summaries of borrowing by email and retrospectively made summaries of borrowing available online for customers.
Shelby Finance has put measures in place to ensure future compliance, the regulator added.
CMA director of remedies, business and financial analysis, Alistair Thompson, commented: “The summaries we require payday lenders to send to customers are crucial in helping borrowers make informed decisions about their loans.
“While it is disappointing to see so many customers not being properly informed, Shelby Finance’s commitment to writing off £500,000 in loans will help put this right. We will continue to monitor the situation and will take further action if needed.”
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