Payday firm CFO Lending has entered administration. Last year the company entered into an agreement with the Financial Conduct Authority (FCA) to provide over £34 million of redress to more than 97,000 customers for unfair practices. The redress consists of £31.9 million written-off customers’ outstanding balances and £2.9 million in cash payments to customers following findings that caused detriment for many customers. Failings dated back to the launch of CFO Lending in April 2009 and included:
- The firm’s systems not showing the correct loan balances for customers, so that some customers ended up repaying more money than they owed
- Misusing customers’ banking information to take payments without permission
- Making excessive use of continuous payment authorities (CPAs) to collect outstanding balances from customers. In many cases, the firm did so where it had reason to believe or suspect that the customer was in financial difficulty
- Failing to treat customers in financial difficulties with due forbearance, including refusing reasonable repayment plans suggested by customers and their advisers
- Sending threatening and misleading letters, texts and emails to customers
- Routinely reporting inaccurate information about customers to credit reference agencies
- Failing to assess the affordability of guarantor loans for customer.
- In August 2014, following an investigation by the FCA, the firm agreed to stop contacting customers with outstanding debts while it carried out an independent review of its past business. It also agreed to carry out a redress scheme.
In February 2016 the FCA, satisfied with the results of the independent review, authorised the firm with limited permission to collect its existing debts but not to make any new loans.
CFO Lending trading names include Payday First, Flexible First, Money Resolve, Paycfo, Payday Advance and Payday Credit. Most of the firm’s customers had high-cost short-term credit loans (payday loans) but some customers had guarantor loans and some had both.
Paul Boyle and David Clements of Harrisons Business Recovery and Insolvency have been appointed to handle the affairs of CFO Lending Ltd. A statement from Harrisons said: “Trading deteriorated sharply since the start of 2017 leaving the company with no viable option for the on-going trading of the business other than to seek the protection of administration while seeking a longer term solution in the interests of all stakeholders.
“As part of on-going trading of CFO Lending and in compliance with FCA guidelines the joint administrators are now liaising with existing customers to ensure they comply with their ongoing duties regarding repayment of their loans.”