Payday lender CFO agrees to pay £35m for 'unfair practices'

Payday lender CFO Lending has agreed to pay out £34.8m of redress to more than 97,000 customers for unfair practices, the Financial Conduct Authority said on Monday.

The FCA pointed to a number of failings on the lender’s part, including misusing customers’ banking information to take payments without permission, making excessive use of continuous payment authorities to collect outstanding balances, sending threatening and misleading letters, texts and emails and failing to assess the affordability of guarantor loans.

The lender, which also traded as Payday First and Flexible First, also routinely reported inaccurate information about customers to credit reference agencies and failed to treat customers in financial difficulties with due forbearance.

Jonathan Davidson, director of Supervision for Retail at the FCA, said: “We discovered that CFO lending was treating its customers unfairly and we made sure that they immediately stopped their unfair practices. Since then we have worked closely with CFO Lending, and are now satisfied with their progress and the way that they have addressed their previous mistakes.

“Part of addressing these mistakes is making sure they put things right for their customers with a redress programme. CFO Lending customers do not need to take any action as the firm will contact all affected customers by March 2017.”

The £34.8m consists of £31.9m written-off customers’ outstanding balances and £2.9m in cash payments to customers.