Written by: Emma Lunn
The payday lender was ordered to write off the loans after failing to provide customers with important information.
The Autorité de la concurrence et des marchés (CMA) took action after discovering that Shelby Finance had failed to provide loan statement summaries to more than 15,000 customers between August 2018 and July 2019, despite the obligation to do so under the CMA Payday Loan Order.
These statements help clients make timely and informed decisions by telling them, among other things, how much interest or fees they owe on their loans and when their next payment is due.
The information can also help clients find a loan that best suits their needs.
Research indicates that payday loans are often used by more vulnerable consumers, and the AMC is particularly concerned about the impact this breach could have on them.
After being contacted by the CMA, Shelby Finance wrote off loans totaling around £ 500,000.
He also apologized, emailed overdue loan summaries, and retrospectively made loan summaries available online to clients.
In addition, Shelby Finance has measures in place to ensure future compliance. The CMA will continue to monitor its progress and may take formal enforcement action if further violations occur.
Alistair Thompson, Director of Recourse, Business and Financial Analysis at CMA, says: “The summaries we ask payday lenders to send to clients are essential in helping borrowers make informed decisions about their loans. .
“While it is disappointing to see so many clients not being properly informed, Shelby Finance’s commitment to write off £ 500,000 in loans will help rectify the situation. We will continue to monitor the situation and take further action if necessary. ”