A former director of QuickQuid’s owner continued to sit on an influential committee at the City regulator as the payday lender headed for administration amid mounting claims for compensation from customers sold-high interest loans.
Nick Lord joined the Financial Conduct Authority’s regulatory decisions committee (RDC) in 2017, two years after he became a non-executive director of CashEuroNet UK, whose best-known brand was QuickQuid.
The RDC reviews FCA decisions on fines, including whether companies or individuals should be allowed to trade and other matters. It can veto FCA decisions or tell the watchdog to do further work on a case.
Lord resigned from CashEuroNet in October 2018, a month after the collapse of Wonga exposed the mounting pressure on payday lenders, which charge high interest rates to people struggling to make ends meet. He continues to sit on the RDC.
CashEuroNet’s US parent, Enova, put the business into administration last week after a dispute with the financial ombudsman over how many customers to compensate over past loans. CashEuroNet was deluged with customer complaints last year and received more than 3,000 claims in the first half of 2019.
The regulator declined to comment on whether Lord would stay on the committee after CashEuroNet’s failure, which has left more than a million customers facing financial uncertainty and may cause claimants to miss out on compensation.
An FCA spokesperson said: “Nick’s role as a non-executive director at CashEuroNet was disclosed and considered during his recruitment process in 2017. Other than the chair, who is an employee of the FCA, the RDC is made up of independent members who are drawn from industry and consumer groups and who take certain decisions relating to how the FCA uses its formal powers. All members adhere to a conflicts-of-interest policy.”
The FCA investigated CashEuroNet after taking over regulation of consumer credit in 2014. It ordered the company to write off more than 2,500 loans and refund 1,500 customers in November 2015 at a cost of £1.7m because it lent people more than they could afford to repay. The FCA appointed Lord to the RDC in April 2017.
Damon Gibbons, the director of the Centre for Responsible Credit thinktank, said: “QuickQuid have been playing fast and loose with the rules for a number of years. It’s shameful that it has gone into administration leaving hard-up customers without compensation while its parent company in the US is profitable and a former director of the company is sitting on an influential FCA committee.”
Payday lenders have been squeezed by political and regulatory pressure over their high-interest loans and complaints brought by claims handling companies. A QuickQuid customer taking out a £250 loan for three and a half months would be charged interest rates equal to an annual percentage rate of 1,300%, according to an example on the lender’s website.
Lord’s biography on the FCA’s website says he has spent more than 30 years representing the interests of consumers in financial services. It says he was an adviser to the Treasury on a review that produced the Money Advice Service and a former member of the Financial Services Consumer Panel.
Lord’s employment at CashEuroNet is not listed in his biography. He was not available to comment.
