QuickQuid, the UK's biggest remaining payday loan provider, is to close with thousands of complaints about its lending still unconcluded. It is the latest firm offering short-term, high-interest loans to close after Wonga folded in August 2018 and The Money Shop closed earlier this year.
The closure of QuickQuid might lead some to think their loan is invalid - but this is not the case. QuickQuid's customers must keep to their regular repayment schedule as if they miss any repayments they could be hit by fees and additional charges - and could also have their credit rating affected.
What happened?
New rules brought in five years ago limited the interest rates and fees payday lenders can charge and introduced enhanced affordability checks. Since then there has been a wave of complaints from customers who say they were mis-sold loans they could not afford. QuickQuid has been facing as many as 10,000 or more outstanding complaints from borrowers.
Such legacy loan complaints, many of which came via claims management companies, were the key reason for the demise of Wonga last year. As well as historical complaints, QuickQuid was also the subject of compensation claims for more recent loans.
The UK's Financial Ombudsman Service said that it had received 3,165 cases against QuickQuid in the first half of the year. It was the second most complained-about company in the banking and credit sector during those six months. The ombudsman upheld 59% of cases against the company during the same period, but a backlog of cases is thought to have built up.
What should I do?
Anyone with eligible complaints who is entitled to compensation will now see the level of any payouts depend on the process of closing the company.
Across the UK, 11.5 million adults have less than £100 in savings so many face cashflow problems which can make quick, short-term credit feel like the only option. If you know you need a specific amount of money for a short while there may be a more affordable alternative out there. The Money Advice Service website has a free guide on alternatives to payday loans.
For help with debt, our partnership of 25 organisations spread throughout London can support people with a wide range of debt and money problems from payday loans to priority debts like council tax and rent arrears. To make a free appointment call our team on freephone 0808 164 2480, lines are open weekdays 10am - 5pm or complete our online enquiry form.
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