Peachy Closes Doors To UK Customers, Now Run By Administrators
06 Mar 2020
Approx Reading time: 3 minutes
- Cash On Go Ltd, Peachy’s parent company, is now being operated by administrators from Smith & Williamson.
- The payday lender would no longer provide loans in the UK.
- Existing customers would continue to make repayments on outstanding loans as per the terms and conditions set at the start of the loan.
- Customers with claims against Peachy for missold loans might now receive considerably smaller compensations against their accepted claim amounts.
Peachy, one of the major payday loan providers in the UK, has collapsed following stronger stance by regulatory authorities on expensive loans in the country.
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A couple of big names in the payday sector, including Wonga and QuickQuid, have previously shut down operations in the country as well.
With Peachy’s closure, customers looking forward to compensation payments against loans they claim were missold to them might now receive a considerably smaller sum on their claim amounts, according to administrators who are now handling Peachy’s business.
According to data reported by Peachy, the lender had served around 2 million customers ever since 2010. However, as of last week, the company was reported to have approx. 29,000 active customers on its accounts. The quoted representative APR on the lender’s website was 855%.
Cash On Go, Peachy’s parent company that has also provided personal loans under the trading name of Uploan, has now received administrators from Smith & Williamson, a financial and professional services firm in the UK.
In recent years, the Financial Ombudsman Service (FOS) in the UK has witnessed a surge in customer complaints received against such expensive loan services. As a result, the complaints handling body is now taking a stronger position to deal with the growing problem.
In Wonga’s case, the hike in costly complaints had led to its fall, and in Peachy’s case, as reported by its administrators in a statement, the issue lies with the financial position of the lender as well as the potential redress claims that can be made in the future. Additionally, efforts had been made by Peachy to secure funds in order to continue its operations, however, these efforts failed to achieve their purpose.
Further details highlighted in the administrator’s statement also revealed that existing customers would continue to honor their loan agreement as per the terms and conditions set during the loan’s origination. This means that customers would continue repaying their loans without any changes.
Failure to make the due loan payments could result in additional charges as well as damage the borrower’s credit score.
Usually, expensive loans of this sort face complaints with respect to the affordability of the borrower, whereby borrowers claim that the lender failed to conduct necessary affordability checks before approving the loan to ascertain whether the borrower could possibly afford to repay it. Other complaints usually claim that lenders have failed to act in a reasonable and fair manner when the financial situation of a borrower changed.